THE South African Revenue Service (SARS) stands by its tax assessment of Dave King, which found that he owed R913m, despite the businessman's insistence in a recent media briefing that the taxman had conceded during legal action that 92% of the assessment was no longer valid.

At the briefing last week, King said he planned to launch an action by the end of the year in the Income Tax Court to have his tax liabilities reassessed. It will be on the grounds that most of the tax claim against him is based on South African assets, which include a Sandhurst property in Johannesburg, a Ferrari and a Hawker 800 XP and Falcon 900 aircraft.

If successful, he said, the move would force SARS to start its legal action against him from scratch, based on new assessments.

SARS spokesman Adrian Lackay said yesterday the taxman stood by its tax assessment for 1990 to 2001. "There is nothing wrong with the tax assessments. They are based on benefits King received from the assets - not the assets themselves."

King's argument on his tax assessment stems from the recent case brought by SARS in the Pretoria High Court aimed at "piercing the corporate veil" to ascertain who owns certain assets in SA, most of which, like a large Sandhurst house, were being used by King.

SARS planned to seize the local assets to settle the tax debt of King and Ben Nevis, a Guernsey-based investment entity that is alleged to owe R1,4bn in taxes for the sale of Specialised Outsourcing shares.

In an affidavit, Gordon Hay, on behalf of SARS, conceded halfway through the recent court case that SARS was no longer pursuing action against King over the South African assets. It accepted an argument by King, representatives of Ben Nevis and offshore holding company Metlika Trading, that the assets, as of December 2000, were no longer owned by King.

SARS believes that as the net closed on Ben Nevis, its South African assets, worth about R500m, were transferred to King's Glencoe Trust and then to Metlika, severing links with Ben Nevis and making it difficult for the taxman to get his hands on the funds.

What SARS is questioning, according to Hay, is "whether the transfer from Ben Nevis to Metlika was an improper transaction in the sense of constituting a fraud on SARS as the creditor or future creditor".

Any fraudulent transaction could be declared null and void, making it possible for the taxman to collect on its taxes from Ben Nevis.

King holds that he cannot be taxed on assets he does not own and it is on these grounds that he will take the case to the Income Tax Court. But SARS contends he can be taxed if he obtains benefits from those assets.

King's tax assessment is made up, among other things, of a R4,8m tax bill on his Sandhurst house, R101,44m on a Falcon 900, R188,47m on a Talacar shareholders loan account, R2,1m on a Ferrari, R17,24m for living expenses and - his largest single tax claim - R200m income from Rangers Football Club, as well as R281,28m in penalties and R20m in taxes on income from the Amazulu Football Club, which King insists he bought for R1 in return for paying outstanding salaries and financial obligations for the club.

King also faces a criminal trial involving more than 300 charges.