Name: Vicki Ammundsen
Email:
Web Site: http://www.cch.co.nz
Bio: Vicki Ammundsen BSc, BCom, LLB. Vicki, a practising barrister and solicitor of the High Court of New Zealand, has ten years' experience in tax and trust law. Before becoming a partner at Ayres Legal, Vicki gained experience in tax and trust law working as a tax practitioner at Minter Ellison Rudd Watts, PricewaterhouseCoopers and Denham Martin & Associates. She is the author of the CCH publication Australian GST for New Zealand Businesses.
Posts by Vicki Ammundsen:
Penny and Hooper
June 8th, 2010The appeal in Penny and Hooper has been decided in favour of the Commissioner in a 2:1 majority decision of the Court of Appeal released on 4 June 2010.
In the first instance the decision could be considered to have been rendered largely nugatory for the time being given the recent reduction of the top marginal rate to that of the trustee rate. However, with the new company rate now significantly below these rates, the matter of below market salaries will likely be a live issue for some time.
Healthy Food
April 28th, 2010The Goods and Services Tax (Exemption of Healthy Food) Amendment Bill (a private Member’s Bill sponsored by Rahui Katene) was pulled from the ballot last week. This Bill proposes to exempt “healthy foods” from GST so that these foods will be more affordable to low-income households. While the motivation for this is laudable, the question that needs to be asked is whether the cost of exempting a relatively narrow range of food groups would place a disproportionate burden on retailers. If this Bill is passed, the doors will be open to questions such as that recently decided in Lansell House Pty Ltd v FCT where the Federal Court of Australia held that the supply of a mini ciabatte (bread) that snaps like a cracker was a taxable supply of a cracker and not a GST-free supply of bread.
See Lansell House Pty Ltd v FCT [2010] FCA 329, Federal Court, Sundberg J, 9 April 2010.
Corporate trustee up-date
April 21st, 2010The recent decision in Newmarket Trustees Limited v CIR is a timely reminder of the risks inherent in the appointment of an assetless corporate trustee. Newmarket Trustees Limited is the trustee for a number of trusts, one of which (the Southern Lights Trust) has substantial unsatisfied tax obligations. Newmarket Trustees Limited acknowledged its liability for the tax obligations (about which it had been unaware when it accepted the appointment as trustee) but sought to have a statutory demand set aside on grounds that included the disruption to other trusts if the trustee was liquidated and the trustee’s lack of involvement in the day to day management of the debtor trust. Declining the application the Court was critical of the trustee’s failure to meet its obligations as a trustee and the absence of any information regarding the Southern Lights Trust’s financial position.
Although it could be hoped that this case can be limited to its facts, it would be interesting to hear readers’ views on whether the practice of using a single corporate trustee company for multiple trustee appointments is still common .
Clarification regarding blue pencil
March 27th, 2010The recent decision in Canterbury Development Corporation & Ors v Charities Commission (see cch.co.nz) provides a useful consideration of the “blue pencil” provisions in s. 61B of the Charitable Trusts Act 1957. Essentially s. 61B can be used to delete provisions of a trust that invalidate a charitable purpose. However, although the section refers to a “trust”, the High Court has interpreted the legislation broadly and to be read as referring to a charitable entity rather than to be limited to a charitable trust. Although this decision did not assist the appellant in this case, it provides a useful clarification regarding the scope and limitations of s.61B .
A fair rate of GST
March 10th, 2010It seems accepted in many quarters now that an increase to the rate of GST is inevitable. If this is the case the figure of 15% appears to be a likely contender for the new rate – even if the math will be hard. I’ve already stated my consumption tax bias, and as an avid home gardener, am currently collecting heirloom seeds for my next home grown home consumed zero-rated crop.
Trust and intention
February 28th, 2010Intention in the context of trusts is more usually seen in the context of the three certainties. However, the recent decision in Ward v Ward [2009] NZSC 125 regarding an application under s. 182 of the Family Proceedings Act, may require looking at intention in the trust context in a whole new light.
What happens to the trust when the love is gone–subtitle another way to pay tax
February 21st, 2010Trusts can provide excellent inter-generational asset protection. However, when relationships break up assets in trust solution (rightly or wrongly – I’ll leave that analysis for another day) are often taken into account. The equal sharing principle of the Property (Relationship) Act 1976 is pretty much standard modus operandi now and accordingly, or despite, many parties fail to appreciate or understand the advantages and limitations imposed when trusts are involved.
Tossing the baby with the bath water
February 12th, 2010It’s been great getting some feedback on thoughts around the design of the tax system. Following on from those thoughts, given the Government’s heads up for property investors it would be great to hear some thoughts on this subject.
In this regard it is noted that it is difficult to reconcile is the view (accepted) that “the tax system lacks integrity and fairness because of differences in the treatment of entities” with the statement that the Government will “be making changes to the way property is taxed.”
Where should tax come from?
February 7th, 2010Tax is topical right now. The Tax Working Group reports have made headline news around the country. Should a new land tax be introduced? Should GST be increased? Is it time for a comprehensive CGT?
Whether we like a tax, however it is imposed, is largely irrelevant. If a tax is imposed we’re stuck with it. That said, it is generally accepted that a “good” tax is one that is seen to be fair (so that less effort goes into evasion) and one that is not so expensive to administer that it contributes little to the tax base.
LAQCs and the family home – are you feeling brave?
January 29th, 2010The recent TRA decision involving Mrs B Taxation Review Authority (“TRA”) No. 024/08 and her family home, which was owned by an LAQC has been criticised by some commentators because the arrangement was not sophisticated, there being no tenancy agreement and no company bank account. However, anecdotal evidence suggests that many if not most LAQC arrangements where the family home is owned by an LAQC are not cleverly executed and in fact Mrs B’s case may well be representative of the type of arrangements involving LAQCs and family homes.
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