Sars Loses Appeal Against South African Supermodel’s Tax Bill in R142m Gift Case

The Western Cape High Court has dismissed the South African Revenue Service’s (Sars) appeal against a ruling involving a R142 million gift to supermodel Candice van der Merwe by former Lebanese Prime Minister Saad Hariri. The court upheld the model’s right to be represented by a non-legal practitioner in tax court proceedings.

In a significant ruling, the Western Cape High Court has dismissed the South African Revenue Service’s (Sars) attempt to impose a tax bill on a substantial gift received by South African supermodel Candice van der Merwe, now known as Candice-Jean Poulter. This marks the second time the court has dismissed Sars’s appeal in a case that has spanned over five years.

The case centers around a R142 million gift Poulter received in 2019 from former Lebanese Prime Minister Saad Hariri. The funds were given to enhance the glamour and exclusivity of an event at a resort in the Seychelles. Sars sought to tax R44 million of this gift, leading to a prolonged legal battle.

Initially, the Tax Court ruled against Poulter without hearing her representation, which was provided by her father, a non-legal practitioner. Poulter contested this decision, arguing that the Tax Court had erred by not allowing her father to represent her. She maintained that the requirement for legal representation was not stipulated in the Taxation Act.

Western Cape High Court Judge Ashley Binns-Ward upheld this argument, stating that tax courts are courts of revision rather than courts of law. Therefore, the restriction against lay representation in courts of law does not apply to tax court proceedings. The judgment allows Poulter to proceed with her appeal in the tax court with her chosen representative.

Sars’s application to appeal this decision was struck off the roll with costs, including those incurred by Poulter in objecting to the court’s jurisdiction. The high court emphasized that it did not have the jurisdiction to grant leave to appeal from its own judgment in the principal proceedings. Consequently, the court did not address the merits of Sars’s application for leave to appeal.

The high court’s decision is grounded in the finding that tax courts function outside the normal forensic hierarchy and involve a first level of adjudication. This position aligns with a previous ruling by the Constitutional Court, reinforcing the notion that tax courts are distinct from conventional courts of law.

Sars has yet to comment on the ruling but is reportedly considering further appeals as its next course of action.

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