Tax Avoidance

(1) Write a report to Ross advising him of any problems, you see in the above steps and whether the agreement between him and IT Ahead trust is void as against the Commissioner by virtue of s BG 1 ITA 2007. Apply the facts above and use appropriate references to the relevant sections of the Income Tax Act 2007 and conclude whether there has been a tax avoidance arrangement which could be attacked by Inland Revenue under the general anti-avoidance rule [GAAR] of the Income Tax Act 2007 and state what the consequences would be.

Your report should cover the following:

At least three significant/relevant New Zealand tax cases to support your opinion. You can also refer to leading cases from other jurisdictions and other New Zealand cases.

The steps from the Interpretation Statement issued by the IRD on 13 June 2013 and relevant tests with relevant case law. (The Interpretation Statement issued by the IRD on 13 June 2013 is available on Blackboard under the assessment icon).

Your report should also consider what (if any) shortfall penalties the taxpayer may be liable for. Include statutory authorities (The Income Tax Act 2007 and The Tax Administration Act 1994).