ARTICLE · 27 FEBRUARY 2014

Renewed Focus On High Net Worth Individuals: The Krok Judgment

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High net worth individuals and their associated trusts have in the past been identified by the South African Revenue Service as posing a risk of non-compliance to tax legislation.

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High net worth individuals and their associated trusts have in the past been identified by the South African Revenue Service ("SARS") as posing a risk of non-compliance to tax legislation. The recent confirmation of a preservation order by the North Gauteng High Court in C:SARS v Krok and Jucool Enterprises Inc. (Case No. 1319/13) now renews the focus of SARS in this regard.

The Krok judgment is significant for a number of reasons - including on the basis that it considers:

section 185 of the Tax Administration Act No. 28 of 2011 ("the Tax Administration Act") which empowers SARS to recover tax on behalf of foreign governments in certain circumstances;
whether one can transfer beneficial ownership of "blocked" assets – i.e. assets placed under the physical control of an authorised dealer subsequent to the emigration of a South African resident;and

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