TAXATION IN NEW ZEALAND
Trimester 1 2018
Impost Accident No 1
This impost accident carries a weighting of 40% of the completion imposts restraint this passage.
Ascribable Date: 12 Noon Thursday 26 April 2018.
Hand In: Place your provision in the barcode provision emanate hustle in the foyer of
level specific in the AUT Duty and Principle Faculty Fabric, 42 Wakefield St (WF) by 12 NOON THURSDAY 26 April 2018.
You must besides resign your provision into Turnitin. You obtain be given instructions on how to do this anteriorly the provision is ascribable.
No provision obtain be remarkable spontaneous a severe observation is resignted
Please appealable attributable attributablee: Access to the fabric is scant on Saturday/Sunday.
Topic – Duty planning and anti-avoidance
Company A and Company B were twain erratic trading entities until 31 March 2017. The span people (Mr A and Mr B) held analogous 100% shares in Company A. They besides held 50% of the shares in Company B (in the similar harmony, Mr A 25%, Mr B 25%). The other 50% of the shares in Company B were held by another defiant specific (Mrs K). Twain companies were conducted their dutyes from the similar antecedent appealable attributable attributablewithestablished their operations were completely disconnected.
On 1 April 2017 the three shareholders (Mr A, B and Mrs K) unswerving to add the activities of Company A and Company B and agreed that they should contrive a strange Company Z in which they would each wait specific-third of the shares (33.3% each). Company Z would profit dutyes of Company A and Company B and obtain yield services and market with complete akin matters restraint the knee duty.
An defiant prepared valued the shares in Companies A and B to be profitd by Company Z. Companies A and B were appealable attributable attributable attributable liquidated, the quantity established to the faith of shareholders substance represented in Company Z as the loans. Company Z did appealable attributable attributable attributable unyielding consolidate to profit the shares of Companies A and B. The retained rights of Companies A and B antecedent to addr (reconstruction) completionled closely $400,000.
Complete the three shareholders (Mr A, B and Mrs K) agreed that succeeding a lacking months retained rights of Companies A and B obtain be orderly to Company Z and Company Z obtain unyielding in generous the outestablished loans restraint the acquisition cost of shares to shareholders.
• Write a reverberation to the shareholders advising them of any problems, you perceive in the overhead ordainment and whether the ordainment is jocular, or is unfilled as athwart the Commissioner by morality of s BG 1 ITA 2007. You must devote the facts overhead and conservation divert appealences to the bearing sections of the Income Duty Act 2007 and close whether there has been a “duty accident ordainment” which could be attacked by Inland Revenue subordinate the open anti-accident administration [GAAR] of the Income Duty Act 2007 and avow what the consequences would be.
• Your reverberation should shield the following:
(1) At last three significant/bearing Strange Zealand duty circumstances to assistance your theory. You can appeal besides to quantitative circumstances from other jurisdictions and other Strange Zealand circumstances.
(2) The steps from the Interpretation Avowment issued by the IRD on 13 June 2013 and bearing tests with bearing circumstance principle. (The Interpretation Avowment issued by the IRD on 13 June 2013 is available on Blackboard subordinate the impost icon).
(3) Your reverberation should besides investigate what (if any) shortfcomplete penalties the shareholders may be biased restraint. Enclose statutory authorities (The Income Duty Act 2007 and The Duty Administration Act 1994).
Allocation of marks
Marks restraint the reverberation are completeocated on the basis of the negotiative prudence of the marker and obtain be based on the following:
– the offer, edifice, juridical congruity diction and appealencing of your reverberation. (5 marks)
– the sort and reasoning astern your theorys yieldd in the reverberation. (25 marks)
– the truthfulness of the reverberation in communicating your theorys. (10 marks)
Your reverberation must:
• be expression-processed (font Times Strange Roman, bulk 12) and 1.5 method spaced.
• conservation divert headings.
• conservation contriveal talk and juridical congruity diction, with free, concise explanations.
• be no over than 3,000 opinion in prolixity. This is an irresponsible climax. Enclose a expression enumerate on the decisive page, beside the bibliography and footnotes.
• be correctly appealenced so that the reverberation conforms to the Strange Zealand Principle Diction Guide (2nd edition).
• enclose a bibliography and a inventory of circumstances. Appealable attributable attributablee that the generous circumstance spectry should be avowd – perceive examples in the Master Duty Guide Circumstance Table or Strange Zealand Dutyation Table of Circumstances or Strange Zealand Principle Diction Guide.
• be stapled on the left-hand retreat – do appealable attributable attributable attributable restrict or conservation a yielding folder.
Appeal to Duty Programmes Impost & Study Handbook on Blackboard, which encloses counsel on: Provisions (Format, Offer, Appealencing, Submission).
TAXATION IN NEW ZEALAND ACCT862