A critical analysis of section 45 of the income tax act 58 of 1962
Date
2023
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Witwatersrand, Johannesburg
Abstract
The introduction of CGT in SA resulted in the birth of the corporate restructuring rollover tax relief to avoid tax on the transfer of assets within the same economic unit. Section 45 of the Act specifically provides a deferral tax rollover relief for the transfer of assets within the same group of companies. The built-in anti-avoidance rules in section 45 of the Act did not prevent taxpayers from abusing this tax rollover relief, instead it gave birth to innovative tax-free exit from investments and debt-push down schemes. Lawmakers mitigated the tax relief abuse by implementing burdensome rule-based anti-avoidance rules. This study aims to critically analyse the intended purpose of section 45 of the Act and how the rule-based anti-avoidance rules in section 45 of the Act unduly hamper the
efficacy of this tax relief.
Description
A research report submitted to the Faculty of Commerce, Law and Management in fulfilment of the requirements for the degree of Master of Commerce in the field of Taxation, University of the Witwatersrand, Johannesburg, 2023
Keywords
Corporate rollover relief, Intra-group transactions, Capital gains tax (CGT), Corporate income tax, Specific anti-avoidance, General anti-avoidance rules (GAAR), Tax resident, Group of companies, Corporate restructuring, UCTD
Citation
Nyoka, Rejoice Nombulelo. (2023). A critical analysis of section 45 of the income tax act 58 of 1962 [Master’s dissertation, University of the Witwatersrand, Johannesburg]. WireDSpace. https://hdl.handle.net/10539/38637