New Zealand Case Law: Decisions & Judgments

Topic

General anti-avoidance provision

Legal area

Court

24 Aug 2011

PENNY AND HOOPER v COMMISSIONER OF INLAND REVENUE SC 62/2010

Citation

PENNY AND HOOPER v COMMISSIONER OF INLAND REVENUE SC 62/2010
Court

Supreme Court

The appellants' use of company and family trust structures together with the deliberate fixation of salaries at artificially low levels objectively had the purpose and effect of diverting income to avoid the top personal tax rate; that constituted a tax avoidance arrangement under s BG 1, s 138G did not bar reliance on loan evidence once discovered, and specific provisions (eg PSA) do not preclude operation of the general anti-avoidance rule.
17 Sept 2010

KRUKZIENER V COMMISSIONER OF INLAND REVENUE HC AK CIV-2010-404-000728

Citation

openlaw-41850fb5_6721_4e30_93a5_eef3617bbe4f.pdf
Court

High Court

The Court held that the pattern of substantial advances and sporadic repayments over a long period, repayments occurring only when non‑taxable capital distributions were available and control by the appellant over both the lenders and distribution sources, evidenced a concerted arrangement. Viewed objectively and commercially, the arrangement had tax avoidance as a dominant purpose/effect because it deferred or relieved income tax and operated outside the intended scope of the specific provisions. The Commissioner was not time‑barred because the taxpayer had omitted mention of the contested r…
19 Dec 2008

BEN NEVIS FORESTRY VENTURES LTD AND ORS V COMMISSIONER OF INLAND REVENUE SC 43/2007

Citation

BEN NEVIS FORESTRY VENTURES LTD AND ORS V COMMISSIONER OF INLAND REVENUE SC 43/2007
Court

Supreme Court

The Trinity scheme, taken as a whole (licence promissory notes, captive insurer CSI and related arrangements), was a tax avoidance arrangement void under s BG 1; the Commissioner was entitled to counteract the tax advantage by reconstruction under s GB 1 and to impose penalties under the Tax Administration Act for abusive tax positions because the deductions, while meeting the literal terms of specific provisions, were used in a manner outside Parliament's contemplation and were artificial in commercial reality.

New Zealand Case Law

PENNY AND HOOPER v COMMISSIONER OF INLAND REVENUE SC 62/2010

KRUKZIENER V COMMISSIONER OF INLAND REVENUE HC AK CIV-2010-404-000728

BEN NEVIS FORESTRY VENTURES LTD AND ORS V COMMISSIONER OF INLAND REVENUE SC 43/2007