The introduction in 2008 of provisions in the Land Tax Act giving the Commissioner power to disregard minority interests in land, and the more recent introduction of general anti-avoidance rules in the Taxation Administration Act, has left many clients exposed to land tax assessments on a multiple holding basis and has given rise to a feeling of uncertainty as to what structures can still be used to effectively maintain separate ownerships.
This paper covers:
- a brief overview of the relevant provisions in the Land Tax Act including the definition of “owner” and the operation of sections 13 and 13A
- a brief overview of the new general anti-avoidance provisions including the meaning of “tax avoidance scheme” and “blatant, artificial or contrived”
- examples of the types of ownership structures that are being investigated by Revenue SA
- examples of situations in which Revenue SA has disregarded minority interests
- examples of structures that remain effective to achieve a separate ownershipunder the Land Tax Act
- a discussion of whether the general anti-avoidance rules could apply to deny the effectiveness of these structures.