McNair and Co

A Whole Lotta Gain, A Whole Lotto Lose: The Tale of Tonda Dickerson

Sam Brune — Sun, 02 Nov 2025 22:55:58 +0000

By the time she was driving her bleeding ex-husband to the hospital, Tonda Dickerson had already been sued by her co-workers, taken to court by a truck driver, and become Alabama’s most unlikely millionaire. And it all started with a single lottery ticket.

The year: 1999. The place: an ordinary diner in Grand Bay, Alabama, where a woman named Tonda Dickerson was working as a waitress.

By the age of 28, Tonda had lived a life that could inspire a country song. She was a divorced single mother who had walked away from an abusive marriage with nothing but her determination and whatever she could fit into a suitcase. By 1999, she was working five shifts a week at the diner. It was barely enough to cover her bills, but it was steady work.

That all changed on the morning that Edward Seward, a regular patron of the diner, tipped Tonda with a lottery ticket instead of cash. Technically, lotteries are not allowed in Alabama (due to state laws), but Edward was a long-haul trucker who made a habit of buying lottery tickets in other states and carrying them around with him. This particularly fateful lottery ticket had been bought in Florida.

It was meant as a quirky gesture. No one – least of all Tonda – thought it would amount to anything. A week later, the winning numbers were announced, and Tonda’s ticket hit for $10 million. Just like that, the woman pouring coffee in a diner uniform became Alabama’s unlikeliest millionaire.

The unmistakable scent of opportunity

As you might imagine, winning the lottery is like ringing a dinner bell for opportunists. Within days, four of Tonda’s fellow waitresses lawyered up. They claimed there had been a pact between them that if any of them ever won from a customer’s ticket, they’d split it evenly. When Tonda disagreed, they took her to court.

Tonda’s opposition even produced a witness in the form of a diner who swore she’d overheard Tonda talk about it right there in the restaurant. Tonda countered that the so-called “customer” was just a friend roped into the scheme, but the judge was unconvinced. The initial ruling went against Tonda, ordering her to share the winnings. But then an Alabama district court reversed it, noting that the agreement – being tied to gambling – wasn’t enforceable under state law.

Next in line was Edward Seward, the trucker who’d tipped her the ticket. When he learned that she’d won, he called up a lawyer of his own. His argument was that Tonda had supposedly promised to buy him a new truck if she won – and he was keen to collect on that promise.

Here’s where a bit of legal jargon called promissory estoppel comes in, which dictates that you can be held to an oral promise if a court decides it was reasonable for the other party to rely on it. But this particular court didn’t buy it. Statistically, a lottery ticket is worth less than the paper it’s printed on. No reasonable person, they decided, could expect a multi-million-dollar return, much less from a ticket they had willingly given away. Hence, Seward’s case was tossed out and his hopes of cashing in on Tonda’s win were erased.

If you can believe it, things got worse from there

Not long after the win, Tonda’s abusive ex-husband found out about her windfall. One afternoon, he appeared outside her home without warning and forced her into his car. He drove in silence at first, heading out of town toward a remote part of rural Alabama. When he finally spoke, it was to tell her he planned to kill her and take the money for himself.

About 20 minutes into the drive, his phone rang. While he was distracted, Tonda reached into her purse for the gun she’d started carrying after their divorce. She aimed it at him. He lunged across the seat to try and take it from her, and in the struggle she fired, hitting him in the chest.

Miraculously, he didn’t die. In a twist that is a testament to her character, Tonda urged him to get medical help, even switching seats with him so she could drive him to the hospital herself. He survived, served a short prison sentence for the kidnapping, and she walked away alive (and still rich).

Not a fix-all after all

Tonda’s story is dramatic, but sadly not unique. In fact, financial advisors have been warning for years that winning the lottery often brings more problems than solutions.

Statistics show that lottery winners are significantly more likely to declare bankruptcy than the average member of society. The windfall often draws out estranged relatives, manipulative friends, and – in some cases – outright criminals. Add to that the fact that most people are not financially disciplined or skilled enough to know how to handle a sudden influx of money, and you’ve got a recipe for disaster.

Just ask:

Amanda Clayton, who won $1 million, kept claiming food stamps, was convicted of welfare fraud, and died of an overdose within a year.
Michael Carroll, who blew £10 million on drugs, sex workers, and building a demolition derby in his backyard.
William Post, who won $16.2 million in 1988, was sued by his ex, and had his own brother try to hire a hitman to kill him. He died broke and estranged from his family.

When money appears overnight, it doesn’t just change your bank balance – the sad reality is that it changes the people around you – and not always for the better. Or perhaps it just reveals them?

Take a lesson from Tonda

Despite the rollercoaster ride that followed after her win, Tonda remained level-headed enough to make some very smart decisions.

Firstly, she declined a lump-sum payout of her winnings and requested 30 annual payments instead. This meant that she would be less inclined to burn through the cash all at once.

Then, she went back to work – not at the diner, but at a casino

The AI Revolution Is Catching CEO’s Off Guard

Sam Brune — Sun, 02 Nov 2025 22:49:12 +0000

Last week my colleague, Dean van Leeuwen, visited the Kennedy Space Centre.

An incredible experience – with the original Mission Control for the Apollo 11 moon landing, and the immensity of the Saturn V rocket – photo-bombed by his son.

But, as Dean mentioned, a really great reminder that behind every engineering marvel is a real human story that matters more.

It’s hard to believe that the Saturn V was built at a time when computers had less processing power than the ones in your washing machine today.

And yet, with such limited technology, humanity found a way to put people on the moon!

That doesn’t mean you can go to the moon in your washing machine, but what it does mean is that the real superpower than, and now, is the human mind.

There’s a lot of talk about AI, quantum computing, automation, and robotics replacing humans today.

AI will, and already is, changing the way we work. But it’ll never replace the uniquely human capabilities we already have:

Intuition
Creativity
Empathy
Resilience and antifragility
Curiosity
And the ability to inspire others

These are the superpowers computers cannot replicate. But what they can certainly do is augment our human capabilities – helping us become bionic, and amplifying our human awesomeness.

The future isn’t man versus machine.

The future is people + machines.

Becoming Bionic … That’s our true superpower.

Non-Resident Beneficiary Trust Distributions – South African Tax Implications You Should Know

Sam Brune — Sun, 02 Nov 2025 22:40:03 +0000

Trusts are common financial tools in South Africa for managing and protecting wealth, but when it comes to tax, things can get a bit tricky, especially if some of the beneficiaries live outside the country. So, if you’re wondering how trust taxation in South Africa works when trust income is paid out to beneficiaries who might be residents or non-residents, you’re in the right place.

Can a South African trust hold offshore assets?

First off, yes – a South African trust can hold offshore assets. That means it can invest outside South Africa, but there are some rules. You’ll need to follow Reserve Bank guidelines and make sure everything is properly reported. If your trust has offshore investments, the tax treatment of the income or gains from those assets depends on where the money comes from and who ultimately benefits.

What types of trusts are common here in South Africa?

You’ll mostly hear about two types:

Inter vivos trusts – these are set up while the person creating the trust (the settlor) is still alive.
Bewind trusts – where a third party manages the assets on behalf of the beneficiary.

Both must be registered with the CIPC and SARS, and trustees must file a trust tax return every year.

How are trusts taxed in South Africa?

When it comes to tax, trusts are treated as taxpayers. If the trust keeps the income inside, it pays tax at a flat rate of 45%. But if the income is “vested” (basically allocated) to beneficiaries, then those beneficiaries are the ones who pay tax on it.

So, if you get income from a trust, you’re responsible for paying tax on that amount, whether you live in South Africa or not.

You might also hear about the IT3(t) form. That’s the certificate the trust issues to beneficiaries to show how much income was paid out.

What happens when income is vested in beneficiaries?

Here’s where it gets interesting. If the income is vested in a beneficiary:

If you’re a tax resident beneficiary (meaning you live in South Africa), you pay tax on that income as part of your regular tax return.
If you’re a non-tax resident beneficiary, different rules apply because SARS wants to tax income that comes from South African sources.

What about trust distributions to non-resident beneficiaries?

If a trust pays out income to someone living outside South Africa, the trust usually must withhold tax on that distribution. This is called withholding tax on trust distributions to non-residents.

Typically, the trust must withhold 20% tax on those payments before sending the money. The exact rate might fluctuate if South Africa has a double taxation agreement (DTA) with the country where the beneficiary lives.

Here, the trust has to fill out an IT10-B form for these distributions. This keeps SARS in the loop and makes sure the right tax is paid.

Taxation of trusts in South Africa – why does this withholding tax matter?

The withholding tax helps prevent double taxation. For example, the non-resident beneficiary might pay tax on the distribution in their home country, but the withholding tax in South Africa ensures SARS gets its share first. If the trust doesn’t withhold the tax correctly, it could face penalties and interest. So, trustees need to get this right.

Reporting and beneficial ownership – what trustees need to know

Transparency is a top priority for SARS right now, especially when it comes to trust in South Africa. As part of ongoing efforts to prevent tax evasion and money laundering, SARS now requires full disclosure of beneficial ownership.

So, what does this mean? It means the trust must declare who the ultimate beneficial owner is – that’s the person who benefits from the assets or income in the trust, even if they’re not the legal owner on paper. This applies to both local and non-resident beneficiaries, and it’s all about ensuring that SARS knows exactly where the money is going and who’s gaining from it.

This ties into what’s known as the conduit principle. In simple terms, the conduit principle allows a trust to pass income directly to beneficiaries without being taxed on it, as long as the income is properly vested in those beneficiaries. However, SARS wants to make sure this isn’t being used as a loophole to shift income offshore or avoid tax altogether.

To stay compliant, trustees must:

Keep a valid Letter of Authority (issued by the Master of the High Court) to confirm they are legally allowed to act on behalf of the trust.
Report all trust distributions accurately, including those made to non-resident beneficiaries.
Issue IT3(t) certificates to all beneficiaries to reflect the income they’ve received during the tax year.
Submit beneficial ownership information to SARS and possibly to the CIPC, depending on the trust structure.

Failure to do any of the above could result in penalties, audits, or even the trust losing its favourable tax treatment.

Long story short? Trustees must now go beyond simply managing the money – they also need to ensure full transparency around who receives what, and where they live.

Can a non-resident be a trustee of a South African trust?

Good question! Yes, a non-resident can be a trustee, but it can complicate things. The trust still must follow South African tax rules and file returns regardless of where the trustees live. So, is it possible? Yes. Is it advisable? Not likely.

Considering dissolving a trust?

If you’re winding up a trust, you’ll need to settle any tax issues first. That means:

Paying CGT on any asset disposals
Submitting final tax returns
Distributing any remaining money according to the trust deed

To wrap up what you need to know about taxation of trusts in SA:

Trusts pay tax on income they keep, but income paid out to beneficiaries is taxed in their hands.
If you’re a South African tax resident beneficiary, you pay income tax vested in you.
If you’re a non-resident beneficiary, expect withholding tax on distributions, usually 20%.
Trusts can invest offshore but must comply with reporting and exchange control rules.
Trustees need to file the right forms (IT3(t)) and IT10B) and report beneficial ownership.
Non-residents can be trustees but should understand the responsibilities.

Big Changes to Who Gets What After Divorce in South Africa

Sam Brune — Sun, 02 Nov 2025 22:27:30 +0000

Justice Minister Mmamoloko Kubayi is preparing to introduce new divorce laws in South Africa by presenting the General Laws Amendment Bill, 2025, to Parliament.

These laws aim to implement changes mandated by the Constitutional Court, simplifying the process for spouses married out of community of property without accrual to receive their fair share in the event of divorce or death.

The proposed changes to South Africa’s divorce laws through the General Laws Amendment Bill could usher in a major shift in how marital property is divided, especially for spouses who have been left financially vulnerable after years of unpaid contributions to a marriage.

The amendments follow a 2023 Constitutional Court ruling that found it unconstitutional for spouses, often homemakers, married out of community of property without accrual to walk away with nothing after divorce or the death of their partner.

“It stems from a reform that aimed to protect spouses who were often left with nothing after divorce or death, despite years of non-financial contributions to the marriage,” Preller said.

He explained that the current law is especially harsh on spouses who stayed at home to raise children or manage the household while their partner advanced financially.

“Women in those circumstances would only have a maintenance claim in a long-lived marriage, which was completely unfair,” Preller added.

The issue stems from the cut-off date of 1 November 1984, when the Matrimonial Property Act came into effect.

Before that, a spouse could bring a “redistribution claim” to request a share of the estate in divorce. But marriages entered after that date without accrual offered no such remedy.

“All marriages now, after 1 November 1984, that spouse will now have a redistribution claim for assets in the divorce,” Preller said.

This redistribution right would also extend to cases involving death, not just divorce. Previously, if a spouse died without a will, the surviving spouse in a non-accrual marriage might be excluded entirely.

“It’s not only women. We see a lot of cases where the woman is the breadwinner,” he said. In those cases, a husband who played the homemaker role would also be eligible to claim redistribution.

Why Is A Will So Important?

Sam Brune — Sun, 02 Nov 2025 22:21:40 +0000

Having a will is crucial because it ensures that your wishes are carried out after your passing, providing clarity and security for your loved ones. Here are some key reasons why having a will is essential:

1. Control Over Your Assets
Without a will, your estate will be distributed according to South African intestate succession laws, which may not align with your wishes. A will allows you to decide who inherits your assets and in what proportions.

2. Appointing an Executor
A will allows you to nominate a trusted person as your executor to handle your estate efficiently. Without a will, the Master of the High Court appoints an executor, which may cause delays and added costs.

3. Protecting Minor Children
If you have minor children, a will enables you to nominate a guardian to care for them. Without this, the court may decide who takes responsibility for them, which may not align with your preferences.

4. Avoiding Family Disputes
Clear instructions in a will help prevent disagreements among family members about inheritance, reducing potential conflicts and legal battles.

5. Providing for Dependents
If you have dependents, such as a spouse, children, or other family members, a will ensures they are financially taken care of according to your wishes.

6. Business Continuity
For business owners, a will can outline how your business should be handled after your passing, ensuring continuity and stability.

It’s always best to consult an estate planning professional to ensure your will is properly drafted and legally compliant.

12 Rules For Financial Success

Sam Brune — Sun, 20 Jul 2025 11:20:27 +0000

Budget.
Buy Assets.
Stay Educated.
Avoid Debt Traps.
Learn to Negotiate.
Track Your Finances.
Live below your means.
Invest Early and Often.
Spend Less than you Earn.
Develop High-Income Skills.
Build Passive Income Streams.
Network with the Right People.

Here Are Some Tips For Website Success

Sam Brune — Sun, 20 Jul 2025 11:18:07 +0000

Things to organise before you start your website.

Gather written content you would like to include on your site.
Pictures are an important part of a website. Add pictures to your front page, meet the team, or even include your place of business. How would you like your customers to see your business?
Video content is even better! Show your customer what you are all about.
Do you have any testimonials? Customers, who love what you do? This is a great way to build trust. You only get one chance at a first impression.
What are the things that you think people would search? How will they Google your business? Can you come up with 10 or more keywords?
Does your business cater to local clientele, national, or international?

South African expats: How will SARS find you?

Sam Brune — Sun, 20 Jul 2025 11:15:27 +0000

For South Africans living abroad, it is imperative to address your tax situation with the taxman proactively.

Since the controversial amendment to Section 10(1)(o)(ii), known as the Expatriate Exemption, took effect on 1 March 2020, a pressing question among South Africans living abroad has been, “How will Sars find me?” This concern is particularly valid for expatriates who currently earn over R1.25 million, given Sars’s intensified focus on ensuring compliance with tax obligations.

For those who have closely followed the changes in South Africa’s tax laws, it is clear that expatriates are being aggressively targeted. Sars has made its intentions evident by establishing a dedicated ‘foreign employment’ unit, specifically tasked with monitoring South Africans working abroad, which is further evident by the introduction of the Notice of Non-Resident Tax Status confirmation letter. But one must be wary of what happens when you fall under their scrutiny. Understanding the nature of a Sars audit and what it entails is essential for any expatriate concerned about their tax obligations.

The great Sars scavenger hunt
When Sars initiates an audit, it is a comprehensive examination of your financial and tax-related activities. These questions and requests from Sars are not mere formalities; they underscore the importance of addressing tax obligation compliance decisively and thoroughly. Expatriates who have relied on quick and easy solutions may find themselves exposed to significant risks, as such approaches often offer little protection in the long run.

The end of offshore hide-and-seek
The global landscape of tax reporting has shifted dramatically due to the Common Reporting Standards (CRS), an initiative by the Organisation of Economic Co-Operation and Development (OECD). The CRS facilitates the exchange of financial information between revenue authorities worldwide, ensuring that taxpayers cannot hide income earned outside their country of tax residence. For South African expatriates, this means that Sars has been tracking and identifying income earned abroad. Under the current tax law, Sars has the authority to tax any foreign-earned income exceeding R1.25 million. This global transparency makes it increasingly difficult for expatriates to evade their tax obligations.

Avoiding the taxman’s wrath: Time to get serious
Compliance with Sars is no longer something that can be taken lightly. The recent inclusion of the terms ‘wilfully or negligently’ in the Tax Administration Act means that expatriates cannot take a “head in the sand” approach. Pleading ignorance or negligence will not shield anyone from the legal consequences, which may include imprisonment or hefty fines.

For South Africans living abroad, it is imperative to address your tax situation with Sars proactively. The risk of being audited is very real, and the potential consequences of non-compliance are severe. Given the global exchange of financial information through CRS, taking immediate and thorough steps to ensure compliance is not just advisable — it’s essential.

Understanding the 2025 Tax Directive Changes for Non-Residents who receive pensions or annuities (UK)

Sam Brune — Sun, 20 Jul 2025 11:07:59 +0000

The South African Revenue Service (SARS) has introduced several significant changes to the tax directive system, forms, guides, and standard operating procedures. These updates are designed to streamline processes, enhance compliance, and incorporate the latest legislative changes. Here’s a comprehensive overview of what you need to know, specifically focusing on pensions and annuities received by non-tax residents.

One of the most notable changes is the automation of the application process for requesting relief from South African tax under Double Taxation Agreements (DTA) for pensions and/or annuities.

This means that you can now submit your applications via eFiling, making the process more efficient and reducing the need for manual interventions. SARS aims to evaluate these applications within 21 working days.

This form is used for requesting relief from South African tax on pensions and/or annuities payable from a South African Retirement Fund. The updated form ensures that the pensions and/or annuities will not be subject to tax in South Africa under the applicable DTA.

Impact on Non-Residents
Non-residents who require a DTA to be considered on the taxation of a Savings Withdrawal Benefit can now include this in their applications. Additionally, the system will no longer accept tax directive applications for the reason “Emigration Withdrawal” as it has been replaced by the “Cessation of South African Residence” process.

Example: How These Changes Help a Retired Non-Resident
Consider the case of Mr. John Smith, an 81-year-old retiree now living in the UK. Mr. Smith is a non-resident in South Africa but receives an annuity income from South Africa as well as a pension income. As a tax resident in the UK, he is required to file a tax return in the UK declaring his worldwide income. However, his pensions and annuities are still being taxed in South Africa, necessitating the filing of a South African tax return.

How the Changes Help Mr. Smith:
1. Automated Relief Application: Mr. Smith can now apply for relief from South African tax on his pensions and annuities under the DTA between the UK and South Africa through the automated eFiling system. This simplifies the process and ensures timely evaluation.
2. Double Taxation Agreement (DTA): According to Article 17 of the DTA between the UK and South Africa, pensions and annuities paid to a resident of either country are taxable only in the country of residence. This means that Mr. Smith’s pensions and annuities should be taxed only in the UK, not in South Africa. By applying for relief under the DTA, Mr. Smith can avoid double taxation and ensure compliance with both countries’ tax laws.

Steps for Mr. Smith:
1. Submit RST01 Form: Mr. Smith should submit the RST01 form via eFiling to request relief from South African tax on his pensions and annuities.
2. Provide Proof of UK Residency: He needs to provide proof of his tax residency in the UK to SARS.

Acceptable proof includes:
– Certificate of Residence (CoR): Issued by HM Revenue & Customs (HMRC), this certificate confirms that Mr. Smith is a tax resident in the UK.
– Tax Returns: Copies of UK tax returns filed with HMRC.
– Utility Bills or Bank Statements: Showing Mr. Smith’s UK address.
– UK Residency Visa or Permit: If applicable.

3. Claim Relief: Once approved, Mr. Smith’s pensions and annuities will be taxed only in the UK, in accordance with the DTA.

These changes are designed to make the tax directive application process more efficient and ensure that it aligns with the latest legislative updates.

Bad Debt, Good News: How to Claim Back VAT The Right Way

Sam Brune — Sun, 20 Jul 2025 10:46:46 +0000

When customers don’t pay, it’s more than just a cash flow headache — you’ve already paid VAT to SARS on money you may never see. The good news? The VAT Act offers relief through adjustments for bad debts. In this article, we break down the practical steps accountants need to follow to help their clients claim back VAT on sales that turn sour.

When Does a Debt Become Irrecoverable?

A debt becomes irrecoverable when it is clear that the customer will not pay, despite reasonable (and documented) efforts to collect. Only at this point can VAT be claimed back under Section 22(1) of the VAT Act.

You may consider the debt irrecoverable in the following common scenarios:
– Customer is liquidated, insolvent or under business rescue.
– The client cannot be reached and has stopped trading or vanished.
– The account is overdue (e.g. 120+ days) with no response to follow-ups.
– Legal advice confirms poor recovery prospects, or the cost outweighs the benefit.
– Debt has been prescribed under the 3-year rule in the Prescription Act.

Writing off a debt is not simply about timing — it’s about making a well-documented decision based on facts and business reality. SARS expects you to apply sound commercial judgment and keep all relevant records for at least five years.

Documentation and Evidence

Before claiming VAT on a bad debt, make sure to retain:
– Original tax invoice – valid and VAT-compliant.
– Proof of collection efforts – emails, calls, final demand letters.
– Aged debtors report – showing how long the account has been overdue.
– Write-off entry – journal entries or management approval confirming the amount is written off.
– Legal or insolvency documents – where applicable (e.g. liquidation notices, court orders).

Claiming VAT Back

You may adjust your VAT declaration to reflect the losses when the amount becomes uncollectable, when certain conditions are met.

Note: VAT adjustment is only allowed if:
– A valid tax invoice was issued
– The full or partial debt is written off in your accounting records, and
– The original transaction was included in your VAT calculation as taxable supplies.

Avoid These Common Mistakes
– Only write off a debt when it’s clearly irrecoverable, not just late. Premature claims will create unnecessary admin complications and can lead to SARS audits.
– Without supporting documents, SARS can disallow the deduction.
– Always apply the rate that was in force when the original invoice was issued.

What If You Recover the Money Later

Under Section 22(2) of the VAT Act, if the customer pays after the VAT was claimed as a bad debt, you must declare VAT on the recovered portion in the tax period in which payment is received.

Practical Tips for Accountants
– Regularly review aged receivables and assess collectability.
– Align VAT adjustments with financial write-offs.
– Set up a workflow to ensure all bad debt claims are properly documented and reflected in VAT201 returns.

Example: Claiming Back VAT on Irrecoverable Debts

Your client (a VAT vendor) sold goods to XYZ Retail on 1 February 2024 for R23,000 (VAT inclusive at 15%). A proper VAT invoice was issued, and VAT was declared and paid to SARS in the February 2024 return.

Despite recovery efforts, only R11,500 had been received by 16 April 2025. On 15 May 2025, the remaining R11,500 was written off as irrecoverable.

Partial Debt Recovery and Write-Off
Original Sale (15% VAT rate)
– Invoice Date: 1 February 2025
– Invoice Total (VAT inclusive): R23,000
– VAT Rate: 15% → tax fraction = 15/115
VAT output paid to SARS: R23,000 × 15/115 = R3,000

Partial Payment Received on 16 April 2025 (Before Write-Off)
– Amount paid by customer: R11,500
– VAT on this payment: R11,500 × 15/115 = R1,500
– Net payment (excl VAT): R10,000
– Outstanding balance: R11,500

Write-Off Bad Debt (15 May 2025)
– The original VAT rate of 15% still applies for this adjustment.
– VAT to be claimed as input (on bad debt): R11,500 × 15/115 = R1,500

Optional: Debt Recovered Later
If R2,300 of the written-off amount is unexpectedly paid in June 2025:
– Still use 15% VAT
– VAT to declare as output tax: R2,300 × 15/115 = R300