9 Jul 2014
P L BROWN FARMS LTD v COMMISSIONER OF INLAND REVENUE [2014] NZHC 1601
- Citation
- [2014] NZHC 1601
- Court
- High Court
There was no legally enforceable nexus between Farms' borrowing (and interest expense) and the income‑earning activities of Farms because the borrowed funds were on‑lent to separate companies that purchased the assets; there was no evidence of an agreement or barter linking foregone interest to reduced rent, and therefore the interest was not deductible under s DA 1; the TRA decision upholding the Commissioner was correct.