Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Glenharrow Holdings Ltd v Inland Revenue

Supreme Court of New Zealand
19 December 2008
MEDIA RELEASE – FOR IMMEDIATE PUBLICATION
Glenharrow Holdings Ltd v Commissioner of Inland Revenue
(SC 59/2007 [2008] NZSC 116)
PRESS SUMMARY
This summary is provided to assist in the understanding of the Court’s judgment. It does not comprise part of the reasons for that judgment.

The full judgment with reasons is the only authoritative document. The full text of the judgment and reasons can be found at www.courtsofnz.govt.nz.

The Supreme Court has unanimously dismissed an appeal by Glenharrow Holdings Ltd in its claim against the Commissioner of Inland Revenue seeking a GST tax refund of the tax fraction (one-ninth) of an amount of $45m which was the purchase price in 1997 of a licence to mine serpentinite and bowenite in Westland. Under the arrangements between the vendor of the licence, Glenharrow and its controlling shareholder a deposit of $80,000 was paid and the balance of the price was discharged and an equivalent amount advanced back to Glenharrow by an exchange of cheques when the license was transferred to Glenharrow, which was a shell company with no other assets.

Only a relatively small amount of stone was extracted before the licence expired three years later and only $210,000 of the advance was ever repaid.

The High Court largely disallowed Glenharrow’s claim, ordering the Commissioner of Inland Revenue to credit Glenharrow with a GST refund of the tax fraction of the Court’s valuation of the licence ($9.75m). The Court of Appeal dismissed Glenharrow’s appeal and, allowing a cross-appeal by the Commissioner, reduced the tax refund to the tax fraction of the payments actually made by Glenharrow.

The Supreme Court has confirmed that ruling, agreeing that the Commissioner was entitled to invoke s 76 of the GST Act 1985 and to treat the arrangement as a tax avoidance. The Court has found that the arrangement entered into to defeat the intent and application of the Act: the price was not paid in economic terms, even though as between the parties a debt was discharged. The structure adopted by the parties achieved no economic effect and nothing significant in commercial terms.

ENDS

SC_59_2007_Glenharrow_v_CIR.pdf

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>

ALSO:

Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>

ALSO:

Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>

ALSO:

Divesting: NZ Super Fund Shifts Passive Equities To Low-Carbon

The NZ$35 billion NZ Super Fund’s NZ$14 billion global passive equity portfolio, 40% of the overall Fund, is now low-carbon, the Guardians of New Zealand Superannuation announced today. More>>

ALSO:

Split Decision - Appeal Planned: EPA Allows Taranaki Bight Seabed Mine

The Decision-making Committee, appointed by the Board of the Environmental Protection Authority to decide a marine consent application by Trans-Tasman Resources Ltd, has granted consent, subject to conditions, for the company to mine iron sands off the South Taranaki Bight. More>>

ALSO: