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


IRD gets to keep $127.5M GST payment from forest sale

IRD gets to keep $127.5M GST payment in central North Island forestry sale

Nov. 28 (BusinessDesk) - The Supreme Court has upheld the Inland Revenue Department's bid to keep $127.5 million goods and services tax on the 2003 sale of 170,000 hectares of central North Island forestry.

The long-running tax dispute stemmed from KordaMentha's Michael Stiassny and Grant Graham, as receivers for Forestry Corp and Citic New Zealand, paying the tax bill in 2003 when selling the forestry assets of Central North Island Forest Partnership for US$621 million. Stiassny and Graham paid the bill amid concerns they may be held personally liable as CNIFP wasn't in receivership.

Bank of New Zealand and CNI Forest Nominees, as additional appellants, believed their charges over the sale gave them priority over the tax department.

Justices John McGrath, William Young, Robert Chambers, Thomas Gault and Peter Blanchard unanimously dismissed the appeal, saying while the receivers weren't personally liable for the charge, it wasn't recoverable because the tax department gave "good consideration" to the payment of GST, which was due and payable.

"More importantly, the claim fails because the Crown gave good consideration by accepting the payment in discharge of a debt which the partnership did owe," the judgment, delivered by Justice Blanchard, said. "There was no unjust enrichment of the Crown at the expense of the partnership."

BNZ and CNI's claim was overridden because the partnership owed the GST, trumping their priority as secured creditors.

The court awarded costs of $40,000 payable to the tax department.

CNI Forest Nominees parent Tenon said it was disappointed with the outcome, but the decision wouldn't have an impact on its existing tax position.

"There was only potential upside to Tenon in taking the action, and no downside to Tenon results from the court’s decision today," said Paul Gillard, Tenon general manager corporate.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Hepatitis A Link: Increased Surveillance Of Imported Frozen Berries

The Ministry for Primary Industries (MPI) Director General has issued a statement warning of a potential risk associated with imported frozen berries following four human cases of Hepatitis A thought to be linked to packaged imported frozen berries. More>>


Shocking Dairy Footage: MPI Failing Our Animals And Damaging Our Reputation

Greens “Nathan Guy needs to urgently look into how his ministry is enforcing animal welfare standards, how these appalling incidents happened under its watch and what it’s going to do prevent similar incidents happening again in the future." More>>


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news