Income Tax


Taxability of gains arising from the disposal of an asset – the presence of “an intention to trade”Featured

It is trite that income tax in Singapore is only chargeable on gains of an income nature, and not on gains of a capital nature. The question in every case is whether a gain is income or capital in nature. The paramount factor in determining whether a gain is of a capital or revenue nature is the objectively-determined intention of the taxpayer (i.e. whether he has an intention to trade) at the time of acquisition of the asset.

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Tax avoidance: shift of profits from a profitable entity to a loss-making one

In the New Zealand case of Honk Land Trustees Ltd v Commissioner of Inland Revenue [2017] NZCA 54; BC201760307, the Court of Appeal considered a tax avoidance scheme relating to a shift of profits from a profitable entity to a loss-making one. The appellant (HLT) is the trustee of the Honk Land Trust (Trust), which owned Honk Land Group Limited. Honk Land Group Limited in turn owned various other companies, including Honk Land Limited (HLL).

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A Novel Argument

A novel argument was raised by the taxpayer in the New Zealand case of CIR v Michael Hill Finance (NZ) Limited [2016] NZCA 276 where the taxpayer alleged that the Commissioner has a duty to act consistently between taxpayers.

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