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Supreme Court to hear another Trinity appeal

Wednesday 20th July 2016

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The Supreme Court has agreed to hear an appeal by the architect of the Trinity forestry scheme, Garry Muir, in the long-running tax dispute, which has already visited the country's top court several times. 

Muir's latest arguments were tossed out in the Court of Appeal in a December ruling, which said his attempts to re-litigate findings on the 1997 and 1998 tax years were "no more than another collateral attack" on the original Ben Nevis court judgment, "continuing what has become an extended pattern or course of conduct" while the claim for the 1999 and subsequent tax years were also an abuse of process and "would commit judicial resources for no purpose and bring the administration of justice into disrepute". 

Justices William Young, Terrence Arnold, and Mark O'Regan today upheld the earlier decision for the 1997 and 1998 tax years but granted Muir leave to appeal a decision striking out his bid to make a claim on subsequent tax years. 

Muir has been granted leave to question whether the Court of Appeal was right in saying he couldn't pursue an argument that earlier rulings didn't block him from claiming deductions under accrual rules in financial arrangements provisions. The hearing will be held next month. 

"Dr. Muir’s application for leave to appeal and submissions in support are not as clear as they might be," the judgment said. "For the avoidance of doubt, the leave granted does not extend to any issues other than those we have identified."

In 2013, the Supreme Court ordered companies associated with the Trinity scheme to pay $2.43 million in 15-year-old back-taxes and penalties . The debts arose from tax deductions claimed by the companies in the 1997 and 1998 tax years, which were then attributed to their shareholders.

The Inland Revenue Department reassessed the shareholders and imposed tax and penalties on them in relation to the 1998 tax year, leading to a series of landmark decisions that have gone on to see tax avoidance redefined by the New Zealand courts over the last decade.

In 2012, the Supreme Court turned down a claim the tax department fraudulently won its tax case in the Trinity scheme in a last-ditch bid to set aside the landmark 2004 ruling, which has been the benchmark for IRD’s successful run of tax avoidance cases. The tax department claimed the Trinity scheme would have cost taxpayers up to $3.7 billion over the 50-year lifespan of the investment.

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