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acct254 midterm
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Cards (42)
evasion
problems
economic
deterrence and
fiscal
psychology model
View source
integrity of tax system
perception of integrity,
rights
of taxpayers, tax payer affairs kept
confidential
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Key powers of the Commissioner
contained in TAA
1994
powers relate to collection of
information
relate to all persons, not just those under
investigation
View source
Secrecy
obligation for
IR officers
(even past) to
maintain secrecy
Section
18
TAA
Person punishable for breach = $
15,000
fine or 6 months prison or both ( s
143
c TAA)
View source
Recording interviews
Generally voluntary
interviewee can
decline
copies give to
taxpayer
and
IRD
admissible as
evidence
Section
17
i - can require any
person
to attend
View source
Tax residency
Determines
liability
for tax regardless of
income
source
View source
Income subject to tax in NZ
Residents
are taxed on wordwide income
Non-residents
only taxed on income earned in NZ
View source
A person is a resident if:
- they have a
permanent
place of
abode
in
NZ
OR
-
personally
present
for more than
183
days in NZ in a
12
month period
(section YD
1
)
View source
A person ceases to be a resident if:
-
cease
to have a
permanent
place
of
abode
in
NZ
AND
- have been
personally
absent
from
NZ
for more than
325
days in a
12
month
period
View source
Permanent place of abode case law:
-
Diamond
- Van
Uden
- Case
U17
View source
Diamond
permanent place of abode: "where a
taxpayer
habitually
resides
from time to time"
simply
owning
a
dwelling
not
sufficient
View source
Van Uden
- mariner worked 8 months per year at sea for
Hong Kong shipping company
-
wife
owned
property
he lived in
-
subscriptions
etc., address
registered
for many things
-
UTP penalty
imposed
Held:
permanent
place of
abode
View source
Case
U17
- taxpayer moved to job in Singapore
-
established
ties in Singapore
- Separated from
wife
Held: not a
NZ tax resident
- no place of
abode
and not present in country
View source
Summary of factors (permanent place of abode)
-
time in
/
out of NZ
-
Accomodation arrangements
-
Employment
/
business
-
Ties with another country
-
Domestic arrangements
-
Financial
/
economic ties
-
Miscellaneous
View source
Transitional residency
exemption for 48 months from NZ taxation on most forms of
foreign income
- excludes
foreign employment
Section HR 8(1)-(7)
View source
Restricted convenants
payment of
restricting
a person's ability to
perform services
S
CE 9
View source
Exit
inducement
payment by
prospective
employer to a person to give up all or part of their
revenue
earning capacity
S CE
10
View source
Henwood
v
CIR
received payment - part was
restrictive
covenant
Held:
capital
- not
taxable
, as restricted from professional activities
HOWEVER not applicable anymore
View source
Golden hello
to encourage a person to take up a position
Taxed under: s
CE 1
OR
CE 10
View source
Golden handcuff
Payment to valuable employee to remain in current
employment
CE 1
(a) "extra pay" OR
CE 1
(g) "other benefit in money"
View source
Extra payments
Taxable
View source
Compensation from employer for humilation, injury to feelings etc
Not
taxable
View source
Lease incentives
Payment by
landlord
to attract tenant to enter
lease
Wattie
v CIR = not
taxable
However, now
taxable
View source
Compensation proceeds
compensation for loss of
income
=
income
Steamship Co Ltd
compensation for loss of
capital asset
= usually not
income
Glenboig Union Fireclay
View source
personal property sales
section CB 3:
profit-making undertaking
or
scheme
section CB 4:
personal property acquired
for purpose of
disposal
section CB 5: dealing in personal property
View source
Dealing with personal property (s CB 5)
only applies to
dealers
View source
What is dealing?
Bates
v
CIR
dealing
connotes
buying, selling or exchanging
reasonable frequency
of transactions or some
continuity
of effort
View source
At what point is a person a dealer?
Hazeldine
v
CIR
purchased
land
before becoming a
dealer
later became
dealer
and sold
land
whether person is a
dealer
at point of
sale
View source
An amount caught by s CB
5
can also be caught under
s CB
1
-
business income
View source
Property acquired for purpose of disposing of (s CB 4)
Applies to
one-off transactions
and no
capital distinction
View source
Meaning of acquired
Taxpayer must take
positive
,
active
step
passive
acquisition (e.g. gift) -
not
sufficient
View source
AG Healing Co v CIR
gain
on
selling property
that was GIFTED not taxable, taxpayer did not take positive step to acquire
View source
Property sold must be the same as property acquired
Bedford
Investments v
CIR
land subdivided
land
is still the same after
subdivision
Taxable
View source
Acquired for purpose of selling/disposing
Subjective test:
purpose
at date of acquisition
View source
National Distributors Ltd v CIR
Created indicators of purpose:
nature
of asset
vocation
of taxpayer
number of
similar
transactions
period of
ownership
circumstances of use and
disposal
View source
CIR v Walker
purchased 63 acres to add to current farm
sold 3 acres for
profit
Dominant purpose at time of
acquisition
= to expand farm NOT
resale
View source
Undertaking or scheme
Two
elements
Undertaking or scheme
Entered for
intention
of making
profit
View source
Duff v CIR
simple purchase and resale not caught under s CB
3
"plan,
design
, program of action devised in order to attain some
end
"
View source
Grieve
v
CIR
Some factors may be useful indicators of whether scheme is
business-like
View source
Profits from shares
Taxable
if fit with CB
3-5
CIR
v
Inglis
View source
See all 42 cards
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