Below is a press release issued by the Inland Revenue Department on Tuesday afternoon. The judgment is here. It dismisses Cullen Group’s challenge to the IRD’s assessment of Cullen Group as liable for about $51.5 million of tax, plus use of money interest and penalties.
Inland Revenue has won a High Court case against Eric Watson’s Cullen Group over a nearly $52 million tax debt.
After a nine-day trial in Auckland in August and September last year, Justice Palmer delivered a written decision today dismissing the Cullen Group’s challenge to the $51,496,127.38 tax assessment.
IRD Legal Services Leader Karen Whitiskie says Justice Palmer’s decision today is the culmination of a lot of hard work by many people.
"The outcome of the High Court process is the result of hard work and dedication by the Inland Revenue team, Crown Law and Counsel. This was a long running issue and shows the dedication of our people in unravelling what went on.
Eric Watson moved from New Zealand to the United Kingdom in 2002 and restructured his business affairs so his shares in Cullen Investments Ltd (CIL) were replaced by loans owed by Cullen Group Ltd (Cullen Group) to companies in the Cayman Islands.
“Mr Watson retained a high degree of control over the relevant entities and was on both sides of the loans. The Court found it was a tax avoidance arrangement and void against the Commissioner,” Karen Whitiskie says.
“Cullen Group was paying tax at a lower rate than it should have been. It paid Approved Issuer Levy (AIL) at two percent when it should have paid Non-Resident Withholding Tax (NRWT) at 15 per cent.”
Justice Palmer dismissed the challenge and ruled Cullen Group is liable for the $51.5m of tax, plus use of money interest.
The parties will now carefully consider the judgment and have until Tuesday, 9 April 2019 to file an appeal.
22 Comments
With the money the IRD get, may I suggest they use some of it to go after a bigger haul and go after all those speculators and flippers and other ignored trendies and traders JK and others invited into our neck of the woulds. (For their 'benefit'....not the norms...)....Money Laundering and what have you.....Start at the top, work yer way down...money for old rope....Obvious.
Fishy is if it smells wrong....and huge money made....go for it.
Corporates are not immune....please note.
1) House prices rose faster before National got into power than after
2) National introduced a bunch of measures (ending depreciation on buildings, tightening thin-cap, brightline, LTC etc) while Labour did comparatively little while in power and only agitated for a CGT after they were given the boot in 2008.
3) National better resourced the IRD to go after property transactions than they ever were under Labour.
But sure, keep pretending everything was fine until late 2008 and then JK personally invented property flipping and homelessness. Baseless assertions are easier than actually thinking eh.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.