Kommissaris van Binnelandse Inkomste v Anglo American (OFS) Housing Co Ltd 1960 (3) SA 642 (A)

Kommissaris van Binnelandse Inkomste v Anglo American (OFS) Housing Co Ltd 1960 (3) SA 642 (A)

Issue: Whether the value of vacant stands for transfer duty purposes includes the value of buildings constructed on the stands before transfer.

Facts:

OFS Land and Estate Co (Pty) Ltd sold 329 vacant stands to Anglo American (OFS) Housing Co Ltd (the respondent) on the condition that the respondent could commence with building work on the stands, but the stands would only be transferred into its name once the Town Council approved the town plans. The purchase price was the price of the land excluding the value of the buildings.

The respondent constructed buildings on the stands before transfer. The Commissioner of Inland Revenue (the appellant) assessed the transfer duty payable by the respondent on the basis of the value of the land and the buildings. The respondent objected to the assessment, arguing that the value of the stands for transfer duty purposes should not include the value of the buildings.

Held:

The Appellate Division upheld the respondent's objection. The Court held that the value of the stands for transfer duty purposes did not include the value of the buildings constructed on the stands before transfer.

Key Facts:

• A company sold vacant stands to another company.
• The purchase price was the price of the land excluding the value of the buildings.
• The buyer constructed buildings on the stands before transfer.
• The Commissioner of Inland Revenue assessed the transfer duty payable by the buyer on the basis of the value of the land and the buildings.
• The buyer objected to the assessment, arguing that the value of the stands for transfer duty purposes should not include the value of the buildings.

Reasons:

The Court held that the value of the stands for transfer duty purposes did not include the value of the buildings constructed on the stands before transfer because:

• The buyer had not acquired any right to the buildings at the time of the sale.
• The buyer had only acquired the right to build on the land.
• The buildings were not part of the land at the time of the sale.

Conclusion:

The Court's decision in Kommissaris van Binnelandse Inkomste v Anglo American (OFS) Housing Co Ltd 1960 (3) SA 642 (A) is a significant case in South African law. The Court's decision clarified the law relating to the value of vacant stands for transfer duty purposes.