New Zealand Case Law: Decisions & Judgments

Topic

Reconstruction

Legal area

Court

10 Mar 2017

HONK LAND TRUSTEES LIMITED v COMMISSIONER OF INLAND REVENUE [2017] NZCA 54 [10 March 2017]

Citation

[2017] NZCA 54
Court

Court of Appeal

HLT failed to prove that HLL provided identifiable management services to the trust and therefore there was no required nexus for a deduction under s BD 2; alternatively, the fees were a contrived device to eliminate the trust's tax and constituted a tax avoidance arrangement under s BG 1, and HLT accordingly took an abusive tax position attracting a 50% shortfall penalty under s 141D TAA.
17 Jun 2016

HONK LAND TRUSTEES LIMITED v COMMISSIONER OF INLAND REVENUE [2016] NZHC 1316 [17 June 2016]

Citation

[2016] NZHC 1316
Court

High Court

There was no evidence HLL provided the alleged management services to the Trust; the $1,116,000 fee was an ex post facto contrivance to eliminate the Trust's taxable income and transfer it to a loss company; consequently the deduction was disallowed and the TRA and Commissioner were upheld; the conduct demonstrated an unacceptable and abusive tax position with a dominant purpose of avoiding tax; appeal dismissed.
29 May 2014

HC SERVICES LTD v CIR [2014] NZHC 1169

Citation

[2014] NZHC 1169
Court

High Court

Fraud by promoters who failed to deliver a compliant employee fund does not prevent the existence of a tax avoidance arrangement where real transactions, documents and steps altered tax incidence; on the facts the appellant was a party to an arrangement with the dominant purpose and effect of avoiding tax and thus took an abusive tax position under s141D(7)(b)(i); appeal dismissed.
13 Aug 2012

RUSSELL v THE COMMISSIONER OF INLAND REVENUE SC 33/2012

Citation

SC 33/2012
Court

Supreme Court

Leave to appeal was declined because the Court of Appeal correctly applied settled legal principles to agreed facts, upheld findings that an arrangement existed which altered the incidence of tax and affected the applicant, that the tax avoidance was more than incidental, and that the Commissioner's reconstruction was not shown to be wrong; the s 99(4) point had no merit and the statutory criteria for leave were not satisfied.
10 Feb 2012

TELSTRA NEW ZEALAND HOLDINGS LIMITED V COMMISSIONER OF INLAND REVENUE HC AK CIV 2010-404-6563

Citation

openlaw-c9013324_106f_4c36_9b7e_c0d26e48a3bc.pdf
Court

High Court

Proceedings were stayed where parties gave undertakings to be bound by the final outcome of the Alesco litigation; Telstra's distinct application to vacate its hearing was not decided on the papers and was timetabled for a one hour hearing after 30 March 2012 with directed dates for affidavits and submissions; a related discovery review by RadioWorks and TVWorks was dismissed as otiose.
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…
11 Jun 2007

ACCENT MANAGEMENT LIMITED AND ORS V COMMISSIONER OF INLAND REVENUE CA CA21/05

Citation

openlaw-73ea2458_7761_4d98_84ac_323d211fe912.pdf
Court

Court of Appeal

The Court dismissed the appeal: although the CSI contracts met the legal form of insurance and the licence nominally constituted a depreciable 'right to use land', the overall Trinity scheme was a contrived, tax‑driven arrangement whose dominant purpose was obtaining immediate tax benefits; the general anti‑avoidance provisions applied, the 2047 insurance premium was accrual expenditure required to be spread, reconstruction of taxpayers' positions was appropriate and shortfall penalties for unacceptable and abusive tax positions were upheld (including as applied to LAQCs and their shareholder…

New Zealand Case Law

HONK LAND TRUSTEES LIMITED v COMMISSIONER OF INLAND REVENUE [2017] NZCA 54 [10 March 2017]

HONK LAND TRUSTEES LIMITED v COMMISSIONER OF INLAND REVENUE [2016] NZHC 1316 [17 June 2016]

HC SERVICES LTD v CIR [2014] NZHC 1169

RUSSELL v THE COMMISSIONER OF INLAND REVENUE SC 33/2012

TELSTRA NEW ZEALAND HOLDINGS LIMITED V COMMISSIONER OF INLAND REVENUE HC AK CIV 2010-404-6563

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

ACCENT MANAGEMENT LIMITED AND ORS V COMMISSIONER OF INLAND REVENUE CA CA21/05