Research Articles (Mercantile Law)

Permanent URI for this collection

https://scholar.sun.ac.za/handle/10019.1/5664

Browse

Browsing Research Articles (Mercantile Law) by Subject "Capital gains tax -- South Africa"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    Share value shifting: a comparison between the anti-avoidance provisions in South African and Australian tax legislation
    (Juta Law Publishing, 2007-02) Jansen van Rensburg, Enelia
    INTRODUCTION: For as long as countries have imposed capital gains tax (CGT), taxpayers have been looking for ways of transferring economic value without becoming liable to pay it. Since CGT is usually triggered by the realisation of an asset, taxpayers soon realised that if they could shift economic value from their assets without selling or otherwise realising the assets, they could avoid, or at least defer, CGT. This led to the notion of share value shifting, which achieves this objective in relation to shares. Taxation authorities in turn recognised the danger which this form of tax avoidance holds for the integrity of a CGT regime and the need for measures to counter it. At the outset the article provides some background on what share value shifting is and how anti-avoidance measures generally aim to prevent this form of tax avoidance. It also explains the scope of the anti-avoidance measures in the South African and Australian tax legislation and the manner in which the measures are incorporated in the general South African and Australian CGT regimes. The article then focuses on the special rules in the South African tax legislation that govern the calculation of CGT in respect of share value shifting and considers some of the difficulties that arise from the fact that these measures fail to interact properly with the general CGT provisions. In the second part of the article, it considers which kinds of share value shifting are targeted by the value shifting anti-avoidance measures in the South African tax legislation and criticises the limited scope of these measures.