Westpac: the Holy Grail of tax avoidance?

• Main Author: Macdonald, Michael Alan (Author)
• Other Authors: Ohms, Chris (Contributor)
• Format: Others
• Published: Auckland University of Technology, 2012-04-05T01:45:08Z.
• Subjects: Tax Avoidance; Westpac; Thesis
• Online Access: Get fulltext

 In this paper the writer looks to see whether the current anti-avoidance provisions are being correctly applied. It looks at the application of these provisions in light of the judgment of Elmiger and Another v Commissioner of Inland Revenue since this was the approach promulgated by Dr A. M. Findlay when the rewrite of the income tax legislation was being enacted through the introduction of the Income Tax Act 1976 ("the ITA 1976"). This determination will be made by analysing four of the recent major tax avoidance cases to see how the judiciary have come to their decisions. Particular focus will be given to the case of Westpac Banking Corporation v The Commissioner of Inland Revenue as this is seen as the leading case involving tax avoidance in New Zealand given that Harrison J had the chance to reflect upon the decision of Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue before releasing his judgment. Despite the best intentions of both Parliament and the judiciary it is considered that the anti-avoidance provisions and their application require modification in order to provide greater certainty going forward and greater strength to the provisions themselves. This is not to be achieved at the expense of tax benefits genuinely intended by Parliament. Much of the changes suggested in this paper requires action by Parliament in order for the anti-avoidance provisions to be rewritten so that greater certainty can be placed on the judicial approach to the provisions and that perceived weaknesses in the wording of the provisions and associated legislation can be addressed.