Johannesburg — Widespread speculation about the reason behind SARS' claim against Dave King has included the sale of his shares from the JSE listed company, Specialised Outsourcing, which he founded as well as possible offshore earnings which have not been taxed locally, or other income generated by him that was not disclosed to SARS.
In the case of the sale of his shares, SARS would have to argue that the sale was of a revenue nature, not a capital nature (the sale took place prior to the implementation of Capital Gains Tax). These cases are very difficult to resolve, says Deloitte & Touche partner, Nithia Nalliah, because they are based on the intention of the individual. This kind of battle could easily land up in the Supreme Court as there are no hard and fast rules, he says.
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