Hon Peter Dunne
Minister of Revenue

Wednesday 24 August 2011 Media Statement

Dunne delighted with Penny and Hooper decision

Revenue Minister Peter Dunne has welcomed the Supreme Court’s decision in the Penny and Hooper case.

Mr Dunne said the decision by the Court to dismiss an appeal by Christchurch Surgeons, Ian Penny and Gary Hooper, and declare that their income arrangement was tax avoidance was the correct decision and a fair one.

“It is important to the integrity of New Zealand’s tax system that everyone pays their fair share of tax,” said Mr Dunne.

“Businesses often use companies and trusts for legitimate reasons and this is not enough to constitute tax avoidance. However, the Court’s decision is a clear signal that people cannot structure their income arrangements in such a way that they artificially reduce their tax liability and still receive the benefits.”

Mr Dunne said that Inland Revenue takes avoidance and evasion seriously as part of its compliance focus and will take action against those individuals who artificially divert income so the income is taxed at a lower marginal tax rate.

“The Government’s move to align the trustee and top personal tax rate has delivered balance to the tax system.”

“Through this realignment, we have not only reduced the opportunities for people to take advantage of the different rates but also any unfair advantage that such income arrangements can deliver,” said Mr Dunne.

ENDS

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