Commissioner for Inland Revenue v Lever Brothers and Unilever Ltd: A practical problem of source

E M Stack; D Grenville; R Poole; H Harnett; E Horn

doi:10.25159/1998-8125/5795

Authors

E M Stack Rhodes University
D Grenville Rhodes University
R Poole Rhodes University
H Harnett Rhodes University
E Horn Rhodes University

DOI:

https://doi.org/10.25159/1998-8125/5795

Keywords:

Lever Brothers and Unilever, South African income tax, source of income, interest, the â€œpractical manâ€, the â€œreasonable manâ€, Chief Justice E.F. Watermeyer, Judge of Appeal O.D. Schreiner, Acting Judge of Appeal, R.P.B Davis

Abstract

Lever Brothers, the South African tax case that formed the basis of this research, was concerned with determining the source of interest income. In its time, this was one of the landmark cases and established tax principles that were valid for 54 years, until superseded by changes to legislation20The research presented a critical analysis of the three judgments in the case, exposing weaknesses in each. It also provided a condensed account of the history of the company, the historical era in which the transactions giving rise to the case took place, a glimpse into the lives of the judges, as well as a discussion of the development in South Africa of the rules for determining source. The most important focus of the research was the discussion of the use and validity of the practical man principle, and it was concluded that this principle should be applied, not in lieu of legal theory, but to restrain its unbridled use when unjust results would ensue.