Has Recent United Kingdom Case Law Affected the Interplay between Place of Effective Management and Controlled Foreign Companies
![handle is hein.journals/safrmerlj24 and id is 440 raw text is: Analysis
Has Recent United Kingdom Case Law Affected
the Interplay Between 'Place of Effective
Management' and 'Controlled Foreign
Companies'?
TRACY GUTJZA*
University of Cape Town
1 Introduction and Background
The approach to locating the 'place of effective management' as the test for
the tax residency of a company in the South African context has yet to be
determined, simply because the phrase is not defined in the Income Tax Act'
and its interpretation in the context of a company has not come before a South
African court.
The matter has only come before a court in the context of a trust in The
Oceanic Trust Company Ltd NO [In its capacity as the trustee fbr the time
being of Specialised Insurance Solutions (Mauritius) Trust, MOBAA/OT/338]
v The Connissioner fbr the South African Revenue Service.' The Western
Cape High Court in Oceanic was asked to make a declaratory order on, inter
alia, the 'place of effective management' and residency of a trust.3 The trust
was registered in South Africa and the trustee, The Oceanic Trust Company
Ltd, located in Mauritius. An asset manager was appointed to manage the
assets invested in South Africa. One issue was whether the 'place of effective
management' of the trust was located in South Africa. In reaching its decision,
the Court indicated the key features to be considered in determining the 'place
of effective management'. Oceanic is therefore relevant where it refers to the
'place of effective management' of a legal entity in general but not specifically
to that of a company.
* B Soc Sci (UCT) BA (Hons) (Unisa) LLB (UCT) LLM (Unisa) LLM (UCL). Senior Lecturer,
Department of Commercial Law, University of Cape Town.
' Income Tax 58 of 1962 ('Income Tax Act'). 'Place of effective management' is one of the tests used
to determine whether a company is tax resident in South Africa as set out in the definition of 'residence'
in s 1 of the Income Tax Act.
2 Unreported, WCC case no 22556/09, 13 June 2011, available at http://vtwt-t.sars.goi.za/Tools/
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424
( 2012. All rights reserved.
Cite as: (2012) 24 SA Mer, LJ424-437.](ViewImageLocal?handle=hein.journals/safrmerlj24&div=40&collection=&method=preview&ext=.png&size=3)
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