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Earthquake Tax Changes – August 2012

Seven New Tax Rules you need to know

By Spencer Smith and Sybrand van Schalkwyk

Before 22 February 2011, our tax rules for insurance payouts were pretty basic.

The tax rules never envisaged the complex situations that many businesses are finding themselves in with their insurers. The experience in the aftermath of Canterbury’s earthquakes quickly revealed the inadequacy of our overly simple rules. 

To give the Government credit where it is due, the IRD’s Policy Unit has moved to address the problems and to enact sensible and pragmatic rules in response to issues such as red zones and the demolition of buildings because they are uneconomic to repair.

This blog summarises 7 tax changes for Insurance Payouts that we think you should know about, including the most recent changes announced earlier this month (now included in an amendment Bill before Parliament).     Read more

Commissioner appeal in Newmarket Trustees allowed

The Court of Appeal has overturned the High Court decision in CIR v Newmarket Trustees Limited (2011) 25 NZTC¶20-030 (the liquidations judgment).  See Commissioner of Inland Revenue v Newmarket Trustee Limited [2012] NZCA 351

Background

Newmarket Trustees is a corporate trustee that acts for a number of trusts.  Newmarket Trustees is insolvent due to unmet tax liabilities in respect of one if the many trusts of which it is a trustee.  Despite the company’s insolvency, which was not in dispute, the High Court took a pragmatic approach and elected to exercise its residual discretion under s 241(4) of the Companies Act and dismissed the application.  Read more

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