Hong Kong Case Law

27 Mar 2002

SOUTHTIME LTD. v. COMMISSIONER OF INLAND REVENUE

Citation

SOUTHTIME LTD. v. COMMISSIONER OF INLAND REVENUE

Court

Court of First Instance

Case number

HCIA6/2001

Section 15C applies when a distinct trading activity (purchase and re-sale of units) ceases even though the taxpayer continues a different activity (letting/investment) in the same building; the Board's finding that the trading activity ceased on transfer of the Unsold Units was supported by the agreed facts and evidence, so trading stock must be valued at open market value and the assessment was correctly increased.

• Section 15c inland revenue ordinance
• Cessation of trade
• Trading stock valuation
• Capital v revenue
• Case stated procedure

9 Jul 1996

Fung Kai Yin and Others t/a Hang Lam Tong Sun Yung Seafood and Medicine Co. v. Director of Lands

Citation

Fung Kai Yin and Others t/a Hang Lam Tong Sun Yung Seafood and Medicine Co. v. Director of Lands

Court

Lands Tribunal

Case number

LDLR12/1995

Under s.10(2)(d) applicants were entitled to compensation restoring their business position absent resumption. The correct test for total extinguishment is whether, on all facts, the business operator can reasonably be expected to continue the business elsewhere (not the Shun Fung relocation trilateral test which applies only to relocation claims). Shops using the same trade name but with different partner combinations are distinct businesses and cannot be treated as continuations. Goodwill is to be valued by capitalizing normal profit trends: taxable profit 1992-93 of approx. HK$600,000 take…

• Crown lands resumption
• Goodwill valuation
• Relocation vs extinguishment
• Trading stock valuation
• Fixtures and fittings depreciation
• Profit rent

COMMISSIONER OF INLAND REVENUE v. TONG KWAN-CHE

Citation

COMMISSIONER OF INLAND REVENUE v. TONG KWAN-CHE

Court

Court of First Instance

Case number

HCIA1/1976

Under Hong Kong law and on the facts the taxpayer received no cash or notional taxed distribution and there is no provision in the Inland Revenue Ordinance treating capitalised reserves as dividends; therefore bonus shares allotted to a share trader in these circumstances carry no imputed cost and must be treated as costing nil for the purposes of computing assessable profits, reversing the Board's majority conclusion that par value could be imputed.

• Bonus shares
• Capitalisation of reserves
• Assessable profits
• Trading stock valuation
• Dividends in specie
• Statutory interpretation