3 Sept 2020
COMMISSIONER OF INLAND REVENUE v FRUCOR SUNTORY NEW ZEALAND LIMITED [2020] NZCA 383
- Citation
- [2020] NZCA 383
- Court
- Court of Appeal
The Court of Appeal held the funding arrangement was a tax avoidance arrangement under s BG 1 because it was an artificial and contrived mechanism to convert a parent equity subscription effectively into deductible interest by packaging it with a $55.4m bank-funded amortising component and a forward purchase; as a matter of commercial and economic reality $55.4m was the effective loan and the balance of the $66.51m claimed deductions represented repayment of principal rather than genuine interest. The Commissioner was entitled under s GB 1 to reconstruct deductions to allow interest only on t…