New Zealand Case Law: Decisions & Judgments

Topic

Capital v revenue

Legal area

Court

10 Aug 2017

EASY PARK LTD v THE COMMISSIONER OF INLAND REVENUE [2017] NZHC 1893

Citation

[2017] NZHC 1893
Court

High Court

The surrender payment was revenue in Easy Park's hands because Easy Park's sole business was leasing commercial property, the lease was part of its ordinary revenue‑producing operations and the payment was an ordinary incident of that business rather than compensation for the loss of a structural capital asset; accordingly the Commissioner's assessment of income stands but the shortfall penalty was not warranted and is quashed.
12 Aug 2016

COMMISSIONER OF INLAND REVENUE v VECTOR LTD [2016] NZCA 396

Citation

[2016] NZCA 396
Court

Court of Appeal

Section CC 1(2)(g) "other revenues" does not encompass amounts of a capital nature; the $53,000,000 Consideration was a capital receipt because Vector effectively and permanently disposed of or impaired its income‑producing rights in the Tunnel and NSTC, so s CC 1 did not render the Consideration assessable income.
18 May 2016

ANZCO FOODS LTD v COMMISSIONER OF INLAND REVENUE [2016] NZHC 1015

Citation

[2016] NZHC 1015
Court

High Court

The settlement did not convey a separate 'right to use land' but varied and removed a restrictive encumbrance (a chose in action) thereby restoring ANZCO's inherent ownership rights; those restored rights run with the fee simple estate and do not have a finite useful life or reasonable expectation of declining value while used, so the payment was capital and not depreciable intangible property under the Income Tax Act 2007; the Commissioner's assessments are confirmed.
17 Dec 2013

SOVEREIGN ASSURANCE COMPANY LIMITED & ORS V COMMISSIONER OF INLAND REVENUE CA506/2012 [2013] NZCA 652

Citation

[2013] NZCA 652
Court

Court of Appeal

The accruals rules governed the commission cash flows; the commission payments were advances/loans (financing) not earned insurance income, no property or transfer of cash flows occurred for s EH 10(2), and consequently the base component was capital in character (non-assessable as income and non-deductible on repayment) while only the excess/interest component was deductible under the accruals regime.

New Zealand Case Law

EASY PARK LTD v THE COMMISSIONER OF INLAND REVENUE [2017] NZHC 1893

COMMISSIONER OF INLAND REVENUE v VECTOR LTD [2016] NZCA 396

ANZCO FOODS LTD v COMMISSIONER OF INLAND REVENUE [2016] NZHC 1015

SOVEREIGN ASSURANCE COMPANY LIMITED & ORS V COMMISSIONER OF INLAND REVENUE CA506/2012 [2013] NZCA 652