Structured Self-insurance: A Win For SARS, But Questions Remain

Recently, the Western Cape High Court in C:SARS v Meiring Citrus (Pty) Ltd (A161/2015) [2026] ZAWCHC, handed down on 26 June 2026, overturned an earlier Tax Court decision and disallowed a citrus farmer’s ZAR9.6 million income tax deduction for what had been described as an insurance premium. The appeal succeeded and the additional assessment, together with a 10% penalty, was reinstated. Respectfully, the High Court’s judgment raises a number of questions that taxpayers and their advisers will want to keep in mind.

Meiring Citrus, a citrus farming company, paid ZAR10 million (excluding VAT) to Santam under a product marketed as “structured self-insurance” crop cover for a six-month period, with an indemnity limit of ZAR12 million. Of this, ZAR400,000 was an underwriting charge; the balance of ZAR9.6 million was credited to an “experience account” held in the company’s name. Claims were paid from that account. The account earned interest, could be pledged as security, and the