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.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Skodafone Goneski: Sky TV, Vodafone Drop $3.44 Billion Merger Plan

Sky Network Television and Vodafone New Zealand have terminated their merger agreement which aimed to create the country's largest telecommunications and media group, and have withdrawn an appeal against the Commerce Commission's rejection of the plan. More>>

Quake Insurance: Reforms To EQC Act Announced

· Increasing the monetary cap from $100,000 (plus GST) to $150,000 (plus GST) for EQC building cover.
· Clarifying EQC land cover is for natural disaster damage that directly affects the insured residence or access to it... More>>

ALSO:

Reserve Bank: Official Cash Rate Unchanged At 1.75 Percent

Global economic growth has increased and become more broad-based. However, major challenges remain with on-going surplus capacity and extensive political uncertainty... More>>

Kaikōura Earthquake: Private Insurers Receive $1.8b Claims

Insurance Council Chief Executive Tim Grafton said most is for commercial loss at $1.36 billion, with residential claims amounting to over $460 million. “...We have a high level of confidence that most people will have received settlement offers by the end of this year." More>>

ALSO:

Forms And Data: New Proposals To Simplify Personal Income Tax

The Government is proposing to make tax simpler for individuals, with people whose only income is from a salary, wages or investments no longer being required to file tax returns to receive tax refunds or to calculate any additional tax. More>>