Name: Vicki Ammundsen
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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:
Tax efficiency in the spotlight
November 23rd, 2011New Zealand tax system has been ranked the 27th most efficient out of the 183 countries surveyed in a report compiled by PricewaterhouseCoopers, the World Bank and the International Finance Corporation.
New Zealand’s average tax rate of 34.4 compares favourably with the average global rate of 44.8 per cent, and Australia’s rate of 47.7 per cent.
New Zealand also rates well on the 8 taxes business must pay when compared with Australia’s 11 and the world average of 28.5. Read the rest of this entry “
Law Society comments on Newmarket Trustees
September 7th, 2011Although the Newmarket Trustees case appeal has yet to be heard, the Law Society has come out in support for the single corporate trustee model.
See http://www.adls.org.nz/about-adls/committees/public-issues-committee/public-issue-papers
Another advantage of the single or dedicated corporate trustee model is the ease (and cost effectiveness) at which the effective control of the corporate trustee can be changed. However, on a cautionary note, a point not made by the Law Society is that where a single corporate trustee is appointed there is a risk, albeit largely theoretical at present, whereby in certain circumstances beneficiaries can claim against the director of a corporate trustee pursuant to a dog-leg claim. Read the rest of this entry “
GST-offsets – a lesson why not to
August 30th, 2011The recent decision in Spicer v Boulcott Development Group Limited HC Wellington CIV-2011-485-714, 24 August 2011 highlights the dangers inherent in GST-offset agreements. Although these agreements will be less common with the amendment to the GST Act allowing zero-rating of land there are still occasions where GST-offset agreements may be contemplated.
The facts of Spicer v Boulcott Development Group Limited are simply that following a taxable supply of land the vendor’s GST liability was to be met through an off-set agreement with the purchaser that was conditionally approved by the Commissioner of Inland Revenue.
Taxpayer not assessable on sale of land acquired with intention of resale
July 31st, 2011The High Court decision in Junior Farms Limited v CIR (CIV-2009-404-2870, Brewer J, 22 July 2011), while perhaps a “fair” result in the circumstances of the case, is difficult to sustain by reference to the Income Tax Act 2007. That said the decision may prove useful for any advisor or trustee where a tax event has arisen following an unintended resettlement.
The case is simple on its face. Junior Farms Limited owned a large block of un-subdivided land that had been rezoned light industrial and flood plain. The entire block of land together with all plant and livestock was sold for $2.681m pursuant to an agreement dated 9 November 1994. In a subsequent agreement between the same parties, dated the following day, the purchaser was to sell the flood plain portion of the land back to the Junior Farms for $100 following a planned sub-division. At the time of the transaction the flood plain land was worth approximately $1.9m.
Lies, damned lies and gifting …
June 30th, 2011In addition to recommending that gift duty be abolished, the report back from the Officials’ Report to the Finance and Expenditure Select Committee on Submissions on the Taxation (Tax Administration and Remedial Matters) Bill highlights some interesting statistics about the use of trusts.
According to the report less than .003% of the 430,000 IRD numbers (that is less than 13 people) who filed gifting statements were bankrupted between 1 July 2001 and 28 May 2010. Presuming the .003% figure is correct, by itself this doesn’t mean an awful lot. However, when you consider that the Ministry of Economic Development records 25,974 bankruptcies during the same period, further consideration is warranted.
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.
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