Rules of interpretation

Question 1

The strict literal approach

Answer 1

• Also known as the ‘golden rule’
• Interpretater primarily concentrates on the literal meaning of the words of the provision that must be interpreted to determine the purpose of the legislator.

Question 2

CASE LAW: strict literal approach

Answer 2

Partington case= If the person sought to be taxed within the letter of the law, he must be taxed.

Cape case =One has to look at what is clearly said

Question 3

The purposive approach

Answer 3

Determines the purpose of the legislation by taking into account all surrounding circumstances and resources.

Question 4

CASE LAW: The purposive approach

Answer 4

SIR case=

CSARS = Courts have placed an emphasis on the purpose with which the legislature has enacted the relevant provision.

Question 5

The contra fiscum rule

Answer 5

The Act is open to more than 1 meaning, the court must follow the interpretation that favors the taxpayer.

Question 6

Substance over form rule

Answer 6

If problems arise in interpreting the meaning of an agreement or transaction, the courts will be concerned with the substance rather than the form of agreement or transaction.

Question 7

Incidence of normal tax

Answer 7

The liability of tax