New Zealand

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  • A new regime for the zero-rating of land transactions for GST purposes came into effect on 1 April 2010.
  • Gift duty will almost certainly be abolished with effect from 1 October 2011.
  • The new anti-money laundering regime will come into effect on 30 June 2013. Detailed regulations have been enacted.
  • Recent case-law developments in the tax avoidance arena have resulted in the ‘creation’ of a new ‘parliamentary contemplation’ test. This allows the courts to determine whether the use of specific statutory provisions to obtain a tax advantage would have been contemplated by parliament at the time the legislation was enacted. If not contemplated, those arrangements can be struck down by the courts. This dubious test is causing disquiet as it overrides long established principles of tax avoidance jurisprudence.

1. Introduction

A. History And Background

New Zealand comprises two main islands and a number of smaller islands situated in the South Pacific Ocean, approximately 2,100 kilometres south east of the Australian coastline.

Total population is approximately 4 million, with about 75 per cent of the population living on the North Island. Wellington is the capital, but Auckland is the largest and most populous city and the commercial hub.

New Zealand was colonised in the 19th century and was subject to a formal treaty in 1840, signed between the representatives of the British Crown and the indigenous Maori people.

The currency is the New Zealand dollar (NZD).

B. Legal System

New Zealand is a constitutional monarchy with a democratically elected Parliament. The head of state is Queen Elizabeth II, whose personal representative in New Zealand is the Governor General.

Parliament is the governing body, made up of 120 members, and consisting of a single house referred to as the House of Representatives. Ministers, who head government departments, form the Cabinet, which is the decision-making body of the parties in power.

New Zealand has a common-law legal system derived from England. The law is based on a substantial body of statute law, supplemented by common-law decisions of the courts.

The New Zealand court system has four tiers:

  • District Court
  • High Court
  • Court of Appeal, and
  • Supreme Court (NZ).

With effect from mid-2004, the government abolished appeals to the Privy Council.

Editorial Board
John W Hart TEP
Barrister and Notary Public, Auckland, New Zealand


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