Savage v Commissioner for Inland Revenue

• Jurisdiction: South Africa
• Judge: Centlivres CJ, Schreiner JA, and Hoexter JA
• Judgment Date: 20 September 1951
• Citation: 1951 (4) SA 400 (A)
• Hearing Date: 13 September 1951
• Court: Appellate Division

G Centlivres CJ:

Appellant was separated from his wife by a notarial deed dated October 2 1945 There were three children of the marriage aged thirteen seven and six years respectively The wife was given the custody of the children and in terms of the deed the appellant undertook H to pay his wife £45 per month as maintenance for herself and to pay £10 per month in respect of each child He further undertook to pay for the education of the children The amounts payable by way of maintenance were to cover expenses other than extraordinary or unusual medical surgical dental or hospital expenses which he might specially agree to pay or in the event of his refusal which he might be ordered by the Court to pay The deed defined what medical surgical dental or hospital

Centlivres CJ

expenses were to be regarded as extraordinary or unusual.

In respect of the income tax year which ended on June 30, 1947, the appellant paid:

(1)

£540 as maintenance for his wife;

(2)

A £360 as maintenance for his children;

(3)

£42 10s. 7d. as educational expenses in respect of his children; and

(4)

£91 4s. 4d. which were extraordinary or unusual medical and hospital expenses in respect of his children.

B The first and second items, which had been paid to the appellant's wife, were allowed by the Commissioner in terms of sec. 58 (3) of the Income Tax Act (Act 31 of 1941) as deductions from the appellant's income but, in view of the decision of this Court in Price v. C Commissioner for Inland Revenue, 1946 AD 676, the other two items were disallowed as deductions, they not having been paid to or on behalf of his wife. The correctness of this disallowance was not at any stage contested. The Commissioner further assessed the appellant to normal tax at the rate applicable to persons, other than married persons, as imposed by sec. 1 (1) (A) (a) (iv) of Act 52 of 1947 and allowed him no D deduction under sec. 13 (2) (a) of the Income Tax Act of 1941.

The appellant lodged an objection and appeal against the Commissioner's assessment on the grounds that he should have been taxed at the rate applicable to a 'married person' as defined in the Income Tax Act and E that there should have been deducted from the amount of his normal tax the sum of £22 10s. as a rebate in respect of his three children.

The Special Court for hearing income tax appeals dismissed the appeal and confirmed the assessments. The appellant now appeals to this Court.

F The relevant sections of the Income Tax Act are as follows: -

'1. In this Act, unless the context otherwise indicates ..... 'married person' means any person who -

(a)

.....

(b)

during the whole of such period was divorced or separated under a judicial order or written agreement, provided such person is G entitled to the deduction in respect of a child under para. (a) of sub-sec. (2) of sec. 13;

13. (2) From the amount of tax payable by a person other than a company there shall further be deducted the following additional amounts, in respect of -

(a)

each unmarried child or stepchild of the taxpayer who was alive during any portion of the year of assessment, for which the H assessment is made, and was not, or would not have been had he lived, over the age of eighteen years, ..... on the last day of the said year of assessment the sum of seven pounds ten shillings: Provided that a parent who has been divorced or separated under a judicial order or written agreement shall not be allowed the deduction in respect of any child born of the marriage in connection with which the divorce or separation has taken place, unless -

(i)

he has maintained during such period such child; and

(ii)

there has not been deducted the cost of such maintenance in terms of sub-sec. (3) of sec. 58 from his taxable income.

Centlivres CJ

58. (3) Any amount payable by way of alimony or allowance or maintenance of his spouse or former spouse and any children under any judicial order or written agreement of separation or under any order of divorce shall be returned as the separate income of such spouse to whom or on whose behalf the amount is paid and shall form part of the taxable income of such spouse. The person by whom such amount is payable shall have his taxable income reduced thereby.'

A It will be noticed that the...