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

 


Capital gains tax debate attracts international experts

Capital gains tax debate attracts international experts to Auckland


Thorny issues associated with the design of capital gains tax regimes are the subject of a debate which is attracting experts from around the world to an Auckland conference next month.

“The literature on the theory of capital gains taxation is substantial, but curiously little has been published on how governments have actually addressed the design dilemmas these taxes present,” says Professor Michael Littlewood from the University of Auckland’s Faculty of Law.

He and Professor Craig Elliffe from the University of Auckland Business School are co-organisers and hosts of the conference which they say will help fill the gap in global information and prove especially helpful in informing debate in New Zealand.

“The intention is not to discuss whether New Zealand should have a capital gains tax, but rather what form it might take if it was introduced,” Professor Littlewood explains.

“The unanswered question is what, exactly, should be taxable and at what rate?”
New Zealand has never had a general capital gains tax - though it does tax some forms of capital gain as income - aligning us with Hong Kong, but setting the country apart from an otherwise almost universally agreed doctrine that it is appropriate in principle to tax capital gains and seriously problematic not to.

Several political parties, and others, have proposed that such a tax should be introduced in New Zealand, making the optimal design of general capital gains taxes a current subject of great importance as we approach a general election, Professor Littlewood says.

Capital gains taxes present a number of knotty questions over a myriad of issues, such as what should be done about the family home.

One view is that gains made on the sale of a family home should be taxed in the same way as any other capital gain, he explains, “but whatever arguments might be marshalled in support of this idea, it seems unlikely to happen because any political party proposing it is unlikely to be elected”.

The question then, is, should family homes be categorically exempt, or should the exemption be subject to limitation, for example to only one tax-exempt family home? Or should it be limited to houses worth less than a prescribed amount – in which case, how much? Or should the prescribed amount relate to the size of the gain, rather than the value of the house? What should be done where the taxpayer buys a house, lives in it for a few years out, rents it out for a few more years, then sells it at a profit?

“The theoretical case for taxing capital gains is the subject of substantial literature, but the literature on practical difficulties associated with design is rather sketchy and may be out of date,” Professor Littlewood says.
“The aim of this project is to make a substantial contribution to the global literature on tax theory.”

The capital gains tax debate will be in two parts with a small symposium including senior Treasury and Inland Revenue officials the day preceding the conference, and a politician-free debate the following day when international experts will explain how their countries have tackled the difficult issues inherent in the system.

The conference speaker line-up in includes New Zealand and international tax experts who are all recognised as leaders in the field. Academics from the Universities of Michigan, British Columbia, Otago, Melbourne, Wellington and Cape Town; senior representatives of tax partners - Gray’s Inn tax chambers of London, Allens of Melbourne, Russell McVeagh and Ernst and Young, and the New Zealand Institute of Chartered Accountants (NZICA), will all present their views.

The overseas speakers are coming to New Zealand with the assistance of the University of Auckland Faculty Research and Development Fund, the Hood Fellowship, Lion Foundation and New Zealand Law Foundation with other sponsorship coming from the University of Auckland Business and Law Schools, NZICA, Ernst and Young and Russell McVeagh.

Title: Key issues in the design of capital gains tax regimes
Date: Friday 18 July 2014
Time: 11.30am to 6.30pm
Venue: The University of Auckland Business School, Owen G. Glenn Building, Level 0, 12 Grafton Road, Auckland

http://www.business.auckland.ac.nz/en/about/od-our-departments/od-commercial-law/claw-seminars-and-events/key-issues-in-the-design-of-capital-gains-tax-regimes.html

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news