Name: John, aka "John Peterson"
Email:
Web Site: http://www.minterellison.co.nz/index.php/ps_pagename/personprofile/pi_peopleid/116
Bio: LLB (Hons), MA, BCL, LLM (International Taxation). John is a tax partner at Minter Ellison in Wellington In addition to providing general commercial tax advice, John assists clients in identifying asset planning solutions and represents individuals, trustees and companies in disputes with the Inland Revenue. Contact Details: DDI: +64 4 498 5028 Mobile: +64 21 895 559 Fax: +64 4 498 5001
Posts by John Peterson:
The Qualifying Company regime should be retained
July 8th, 2010Submissions on the Governments proposals for the taxation of QCs and LAQCs closed at the beginning of this week. We can see no justification for repealing the qualifying company (QC) regime. The proposed reforms should be confined to loss-attributing qualifying companies (LAQCs).
Tax Changes in Australia – will 1% make a difference.
July 6th, 2010New Zealand’s company tax rate will be lower than Australia’s, after new Australian Prime Minister Julia Gillard today announced that the Australian corporate tax rate would not be cut below 29 percent.
Revenue Alert 10/01 – Taxation by Press Release?
June 25th, 2010BR Pub 10/01 – 10/05: Ability of NZ Partner in Australian Limited Partnership (ALP) to claim foreign tax credits
May 12th, 2010In this set of binding rulings the Inland Revenue addresses the foreign tax credit position for NZ resident investors in hybrid ALPs (i.e. Australian Limited Partnership (ALPs) that are subject to tax in Australia as companies but treated as pass-through for NZ tax purposes). The rulings conclude that a NZ resident investor will be entitled to a tax credit for Australian corporation tax paid by the ALP but not for any withholding tax on a distribution from the ALP.
Boiler Plate GST Clauses
May 10th, 2010The NSW Supreme Court has recently handed down two decisions which consider when the contractual remedy of rectification for mistake is available in relation to GST clauses.
Both cases involved a sale of commercial/retail premises by auction where a dispute arose due to inconsistency between the written terms of the sale contract and the oral evidence regarding the intention of the parties as to whether the agreed price was GST inclusive or exclusive. In both cases, the sale contracts contained no special conditions regarding GST so the standard GST provisions operated by default to make the price GST inclusive.
Draft Standard Practice Statement ED0117: Recording Inland Revenue Interviews
May 6th, 2010Inland Revenue have released a draft standard practice statement (ED0117) on the recording of interviews (either voluntary or under section 19 of the Tax Administration Act 1994 (TAA)).
The practice statement provides that Inland Revenue will advise the taxpayer when it is intended that an interview will be recorded. Compulsory interviews under section 19 of the TAA will always be recorded (consent is not required), whereas voluntary interviews will only be recorded with the consent and cooperation of the interviewee. Inland Revenue have specifically stated there will be no secret recording of interviews. In most cases, upon request to Inland Revenue, the interviewee will be provided with a copy of the recording (written, audio or visual). Inland Revenue will withhold a copy of the recording where there is reason to suspect that providing a copy is likely to “prejudice the maintenance of the law”.
A simpler alternative to income splitting?
April 1st, 2010In a speech to the Tax Agents Institute conference in Greymouth last Wednesday, Revenue Minister Peter Dunne confirmed that he would push ahead with legislation on income splitting.
His prospects of success look bleak. With marginal rate tax cuts for the wealthy already on the table for this year’s budget there is unlikely to be any money or political appetite for another middle class tax break.
Residential Care Subsidy – Means Assessment and Gifted Assets
March 23rd, 2010Advisors may be under the impression gifting assets to a family trust will provide some degree of protection from a means assessment for the residential care subsidy under the Social Security Act 1964. However the level of protection is not as significant as you may initially have thought.
It is widely known that the means assessment “adds back” gifts made within 5 years of the date of assessment if the gift is in excess of 5,500 p.a. It is perhaps less widely known that this claw back also extends to gifts made by the person’s spouse or partner.
Case Z24 – Troubling trends in tax avoidance jurisprudence
March 17th, 2010In Case Z24 the taxpayer had transferred an avocado orchard and her private practice as an anaesthetist to a family company. In the 2003 and 2004 years she provided her services to the family company for a nil or low salary. The Commissioner had argued that the rent paid by the family company to the family trust for the lease of the orchard was inflated and the salary paid to the taxpayer for her services was too low. Judge Barber was unimpressed by the Commisioner’s arguments as to the inflated rent but held that the payment of an artificially low salary was tax avoidance.
Two elements of this case are troubling: there was no reference to Penny & Hooper anywhere in the case, notwithstanding the High Court decision was delivered over a year ago; and there is no explanation of how the tax consequences of combining a loss-making business (the orchard) with a profitable business (the private practice) achieved a result that was manifestly outside the contemplation of Parliament. If it is accepted, which it appears to have been, that in aggregate there was little in the way of distributable profit from both businesses, then what principle of tax law would compel the owner to pay themselves a salary?
Notes on the Westpac Case
October 8th, 2009On Avoidance Generally …
- No real need to look at pre-Ben Nevis cases [para 170]
- Ben Nevis is a “diplomatic rejection” of the orthodox principles of tax avoidance set out in Richardson J’s majority decision in Challenge [para 176]
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