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: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news