Hong Kong Case Law: Decisions & Judgments

Topic

Ramsay principle

Legal area

Court

4 Jun 2021

AMPLE SUN LTD v. COLLECTOR OF STAMP REVENUE

Citation

[2021] HKDC 659
Court

District Court
Case number

DCSA42/2013

The court held the four assignments were interdependent parts of a larger transaction, the stated considerations were artificially suppressed and the 6-year tenancy/advanced payment arrangements were contrived or unsupported; accordingly under s27(4) the assignments were deemed conveyances operating as voluntary dispositions inter vivos and stamp duty was to be assessed by reference to the Commissioner’s aggregate valuation of the Property ($15,730,000) at the applicable ad valorem rate (3.75%).
4 Jun 2021

LAND CONCEPT LTD v. COLLECTOR OF STAMP REVENUE

Citation

[2021] HKDC 659
Court

District Court
Case number

DCSA111/2016

The court held the four assignments were interdependent parts of a larger transaction and not fortuitous; the stated considerations were artificially suppressed and, absent credible evidence of advance rental payments or commercial rationale for the 6-year tenancies, those tenancies/advanced payments were disregarded under the Ramsay approach; accordingly the assignments were deemed conveyances operating as voluntary dispositions under s27(4) and stamp duty was assessed by reference to the Commissioner’s aggregate valuation of the property ($15,730,000) at the applicable ad valorem rate 3.75%…
13 Feb 2007

HONGKONG INTERNATIONAL TERMINALS LTD v. COMMISSIONER OF INLAND REVENUE

Citation

HONGKONG INTERNATIONAL TERMINALS LTD v. COMMISSIONER OF INLAND REVENUE
Court

Court of First Instance
Case number

HCIA15/2005

The Board erred in law in holding that 'no real money' was raised by the Strategic Notes and that they were artificial and fictitious; the Notes were legally issued and capable of producing real funds and interest was potentially deductible under s.16; s.61A can cover deductible interest as a 'tax benefit' but factual determinations on sole or dominant purpose under s.61A are for the Board and must be reconsidered without the unsustainable 'no real money' premise. The appeals are allowed and the matters remitted to the Board for redetermination consistent with this judgment.
13 Feb 2007

HIT FINANCE LTD v. COMMISSIONER OF INLAND REVENUE

Citation

HIT FINANCE LTD v. COMMISSIONER OF INLAND REVENUE
Court

Court of First Instance
Case number

HCIA14/2005

The Board erred in law by finding that no real money was raised by the Strategic Notes and by treating the Strategic Notes as artificial and fictitious; on sustainable findings the Notes were legally effective and interest could be deductible under section 16, and the determinations under sections 61/61A require reconsideration by the Board with correct factual premise (remitted).
4 Dec 2003

THE COLLECTOR OF STAMP REVENUE v. ARROWTOWN ASSETS LTD

Citation

THE COLLECTOR OF STAMP REVENUE v. ARROWTOWN ASSETS LTD
Court

Court of Final Appeal
Case number

FACV4/2003

Applying the Ramsay purposive approach the court held the non-voting shares were created and issued solely to secure stamp duty relief and had no genuine commercial purpose; they therefore should be disregarded in calculating issued share capital under s.45(2), so the Memorandum was not relieved and is chargeable to stamp duty; additionally the Collector's arguments on outsider provision of consideration and s.45(5) were rejected on the facts but the core decisive ground was disregard of the artificially created shares.
22 Nov 2001

ARROWTOWN ASSETS LTD. v. THE COLLECTOR OF STAMP REVENUE

Citation

ARROWTOWN ASSETS LTD. v. THE COLLECTOR OF STAMP REVENUE
Court

District Court
Case number

DCSA52/2000

The DC Agreement formed part of the consideration for the land assignment and included contractual promises by Calm Seas (an outsider) (notably clause 14), thereby infringing s.45(4)(a); the Loan Note was to be parted with pursuant to the Share Sale Agreement in consequence of transactions involving payment by an outsider, infringing s.45(5); the Ramsay approach did not permit disregarding the issued deferred shares because the statutory concept of 'issued share capital' and 'associated body corporate' are legal concepts and the shares were legally valid; accordingly intra-group relief under…
12 Jul 2000

SHIU WING LTD. AND OTHERS v. THE COMMISSIONER OF ESTATE DUTY

Citation

SHIU WING LTD. AND OTHERS v. THE COMMISSIONER OF ESTATE DUTY
Court

Court of Final Appeal
Case number

FACV17/1999

The Court held the Ramsay principle did not justify recharacterising completed, genuine transfers for full consideration into gifts of Hong Kong property; the transactions, viewed realistically, converted Hong Kong assets into offshore specialty debts or foreign proceeds and therefore fell outside s.6(1)(c); quasi-sham and associated-operations arguments failed; accordingly the High Court declaration was restored and the appeal allowed.
20 Aug 1999

SHIU WING LTD. AND OTHERS v. THE COMMISSIONER OF ESTATE DUTY

Citation

SHIU WING LTD. AND OTHERS v. THE COMMISSIONER OF ESTATE DUTY
Court

Court of Appeal
Case number

CACV199/1998

By majority the Court held that the pre-ordained composite transactions contained intermediary steps that had no commercial purpose apart from avoidance of estate duty and therefore those steps were to be disregarded under the Ramsay principle; the true end result was an effective inter vivos disposition of Hong Kong-situate property to offshore trustees within three years of death and the transfers were chargeable to estate duty.