QUESTION Joshua Anderson and Jonathan Rhys, both residents, had for many years successfully operated a business in partnership. They had shared profits and suffered losses equally. At the commencement of the 2013 year of assessment, they incorporated their company. The reasons for this were: 1.To limit their personal liabilities; 2.To give the business an opportunity for perpetual succession; 3.To be able to admit new shareholders into their business; 4.To be able to change the profit or loss sharing ratios; and 5.To reduce their personal tax liabilities. Their business market value was in excess of its net asset value. This meant that a goodwill account was created in the company. Peter and Paul then advanced funds to the company so it could pay the partnership for the newly formed company. The creation of the company resulted in a tax saving for both the former partners. The Commissioner has informed Joshua and Jonathan that he is going to raise the provisions of section 95 against them on the grounds that the incorporation of their company was an impermissible tax avoidance arrangement. REQUIRED: Discuss whether the Commissioner can apply the General Anti-Avoidance provisions in terms of section 95 in respect of the above operation.