Chief Assessor v HSBC: Property Tax & Annual Value of Shopping Centre Units
The Chief Assessor appealed against the Valuation Review Board's decision regarding the annual value assessment of tenanted units in Bugis Junction, owned by HSBC Institutional Trust Services (Singapore) Ltd as trustee of CapitalMall Trust. The High Court, presided over by Belinda Ang Saw Ean J, heard the appeal on 4 June 2012. The central legal issue was whether depreciation of escalators, lifts, air-conditioning, and fire safety systems should be excluded from gross rent when computing the annual value for property tax purposes. The High Court allowed the Chief Assessor's appeal, ruling that the depreciation component should be included in the annual value calculation.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Chief Assessor’s appeal allowed with costs.
1.3 Case Type
Tax
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding property tax assessment of Bugis Junction units. Court held depreciation of asset items should be included in annual value.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| HSBC Institutional Trust Services (Singapore) Ltd | Respondent | Corporation | Appeal dismissed | Lost | |
| Chief Assessor | Applicant | Government Agency | Appeal allowed with costs | Won | Alvin Chia of Inland Revenue Authority of Singapore Joanna Yap of Inland Revenue Authority of Singapore |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Belinda Ang Saw Ean | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Tan Shao Tong | Wong Partnership LLP |
| Leung Yew Kwong | Wong Partnership LLP |
| Novelle Chan | Wong Partnership LLP |
| Alvin Chia | Inland Revenue Authority of Singapore |
| Joanna Yap | Inland Revenue Authority of Singapore |
4. Facts
- HSBC Institutional Trust Services is the trustee of CapitalMall Trust, which owns Bugis Junction.
- Bugis Junction has 180 units leased to various businesses.
- The Chief Assessor included depreciation of asset items in the gross rent when computing annual value for 2004 and 2005.
- The Landlord appealed to the Board, which accepted the Landlord’s contention.
- The gross rent included $0.20 per square foot for depreciation of asset items.
- The asset items are escalators, lifts, air-conditioning, and fire safety systems.
- The asset items are required to provide services agreed to by the Landlord.
5. Formal Citations
- Chief Assessor v HSBC Institutional Trust Services (Singapore) Ltd, Originating Summons No 422 of 2011, [2012] SGHC 120
6. Timeline
| Date | Event |
|---|---|
| Originating Summons No 422 of 2011 filed | |
| Valuation Review Board made decision | |
| Judgment reserved | |
| Appeal to this decision in Civil Appeal No 80 of 2012 was dismissed by the Court of Appeal |
7. Legal Issues
- Annual Value Assessment
- Outcome: The court held that the depreciation component in the gross rent should be included in the computation of annual value.
- Category: Substantive
- Sub-Issues:
- Inclusion of depreciation in gross rent
- Definition of annual value
- Related Cases:
- [2007] 2 SLR(R) 580
- [1959] SPTC 1
- Fixtures vs Chattels
- Outcome: The court determined that the asset items (escalators, lifts, air conditioning, and fire safety systems) were fixtures and part of the building.
- Category: Substantive
- Sub-Issues:
- Degree of annexation
- Object of annexation
- Enhancement of property value
- Related Cases:
- [1992] 3 SLR(R) 236
- [2008] 3 SLR(R) 569
- [2008] 2 SLR(R) 724
- [2007] 3 SLR(R) 326
- [1872] LR 7 CP 328
8. Remedies Sought
- No remedies sought
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Tax Litigation
- Property Tax Assessment
11. Industries
- Real Estate
- Retail
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| BCH Retail Investment Pte Ltd v Chief Assessor | High Court | Yes | [2007] 2 SLR(R) 580 | Singapore | Cited for the principle that any component of gross rent that was for services and not related to rent must be excluded from the gross rent for purposes of calculating annual value. |
| Chartered Bank v The City Council of Singapore | High Court | Yes | [1959] SPTC 1 | Singapore | Cited for the exclusion of the cost of services and the landlord’s profit for providing those services from the gross rent to determine annual value, and for allowing the exclusion of depreciation of equipment from gross rent as well. |
| People’s Park Chinatown Development Pte Ltd v Schindler Lifts (Singapore) Pte Ltd | High Court | Yes | [1992] 3 SLR(R) 236 | Singapore | Cited in the context of whether items are permanent features of a building. |
| Pan-United Marine Ltd v Chief Assessor | Court of Appeal | Yes | [2008] 3 SLR(R) 569 | Singapore | Cited generally regarding the definition of 'building' and fixtures. |
| Chief Assessor and another v First DCS Pte Ltd | Court of Appeal | Yes | [2008] 2 SLR(R) 724 | Singapore | Cited regarding fixtures affixed to land. |
| First DCS Pte Ltd v Chief Assessor and another | High Court | Yes | [2007] 3 SLR(R) 326 | Singapore | Cited for the explanation of section 2(2) of the Property Tax Act regarding machinery. |
| BCH Retail Investment Pte Ltd v Chief Assessor | High Court | Yes | [2002] 2 SLR(R) 973 | Singapore | Cited regarding tenants’ advertising and promotional contributions. |
| Tan Hee Liang v Chief Assessor | Court of Appeal | Yes | [2009] 1 SLR(R) 335 | Singapore | Cited regarding the correctness of the Chartered Bank case. |
| Holland v Hodgson | Court of Common Pleas | Yes | [1872] LR 7 CP 328 | England | Cited as authority that the two considerations for determining whether objects are fixtures or chattels are: (a) the degree of annexation; and (b) the object of annexation. |
| Hamp v Bygrave | English High Court | Yes | (1983) 266 EG 720 | England | Cited regarding the purpose of annexation in determining whether items are fixtures or chattels. |
| Re de Falbe, Ward v Taylor | Court of Appeal | Yes | [1901] 1 Ch 523 | England | Cited regarding items firmly fixed to the land remaining chattels if the purpose of the annexation was to enjoy them as chattels. |
| D’Eyncourt v Gregory | Court of Chancery | Yes | (1866) LR 3 Eq 382 | England | Cited regarding articles intended to improve the land being regarded as fixtures. |
| Leigh v Taylor | House of Lords | Yes | [1902] AC 157 | England | Cited regarding the purpose of annexation. |
| London County Council v Wilkins | House of Lords | Yes | [1957] AC 362 | England | Cited regarding the enhancement test. |
| Field Place Caravan Park Ltd v Harding | English Court of Appeal | Yes | [1966] 2 QB 484 | England | Cited regarding the enhancement test. |
| Rudd v Cinderella Rockerfellas Ltd | English Court of Appeal | Yes | [2003] 1 WLR 2423 | England | Cited regarding the enhancement test. |
| Caltex Trading and Transport v Cane | N/A | Yes | (1962) 9 RRC 313 | England | Cited as an example of depreciation being excluded from annual value. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Property Tax Act | Singapore |
| Property Tax Act (Cap 254, 2005 Rev Ed) s 6(1) | Singapore |
| Property Tax Act (Cap 254, 2005 Rev Ed) s 2(1) | Singapore |
| Property Tax Act (Cap 254, 2005 Rev Ed) s 2(2) | Singapore |
| Property Tax Act (Cap 254, 2005 Rev Ed) s 35 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Annual value
- Gross rent
- Depreciation
- Asset items
- Fixtures
- Chattels
- Property tax
- Valuation
- Notional expense
15.2 Keywords
- Property tax
- Annual value
- Depreciation
- Bugis Junction
- HSBC
- Singapore
- Valuation
- Chief Assessor
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Property Tax | 75 |
| Property Law | 60 |
| Revenue Law | 50 |
| Contract Law | 30 |
16. Subjects
- Property Tax
- Annual Value Assessment
- Depreciation of Assets