Judgment: Inland Revenue v Trustpower

[Full judgment: CommissionerofIRvTrustpowerLtdCA8302013.pdf]

COURT OF APPEAL OF NEW ZEALAND

19 June 2015

MEDIA RELEASE – FOR IMMEDIATE PUBLICATION

Commissioner of Inland Revenue v Trustpower Ltd

(CA 830/2013) [2015] NZCA 253

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 Judicial Decisions of Public Interest:

http://www.courtsofnz.govt.nz/from/decisions/judgments.html

The Court of Appeal (the President Justice Ellen France, Justice White, and Justice Miller) has today released its decision in Commissioner of Inland Revenue v Trustpower Ltd. The taxpayer, Trustpower Ltd, is a company which generates, buys and sells electricity. It spent some $17.7 million investigating and applying for resource consents for four possible new hydro and wind plants. The High Court held the expenditure was deductible on revenue account for tax purposes.

The Court of Appeal has allowed the appeal brought by the Commissioner. It found Trustpower Ltd incurred the expenditure for the purpose of decisions relating to the expansion of its electricity generation business. The resource consents were valuable capital assets. The expenditure was not incurred in earning income by generating and selling electricity but rather it was capital expenditure. The Court has therefore held the expenditure was not deductible on revenue account for tax purposes.

[Full judgment: CommissionerofIRvTrustpowerLtdCA8302013.pdf]

© Scoop Media