Assessability of Distributions from Assets Revaluation Accounts of Companies

New Zealand Current Taxation, Vol. 26, pp. 224-226, 1982

2 Pages Posted: 2 Mar 2010  

John Prebble QC

Victoria University of Wellington - Faculty of Law; Institut für Österreichisches und Internationales Steuerrecht, Wirtschaftsuniversität Wien; University of Notre Dame Australia - School of Law

Date Written: 1982

Abstract

Moss & Mardon v Commissioner of Inland Revenue (1982) 5 NZTC 61,151 involved taxpayers who held shares as trustees in a company. The taxpayers received dividends from the shares. It is common ground the dividends were taxable unless saved by section 4(5) of the Income Tax Act 1976, which provides that certain dividends paid out of capital profits of a company are not taxable in the hands of the shareholders. There are two circumstances where the exception applies. First, where a company has realised a capital asset and the whole or part of any profit arising from the realisation is subsequently included in a distribution to shareholders; secondly, where a company has made a capital profit or gain and the whole or part of that profit is included in the dividend. The judge decided that neither of these rules applied in the circumstances and held that the Commissioner was correct to tax the dividends.

Keywords: Income Tax Act 1976, Dividends, Assessability

JEL Classification: K34

Suggested Citation

Prebble QC, John, Assessability of Distributions from Assets Revaluation Accounts of Companies (1982). New Zealand Current Taxation, Vol. 26, pp. 224-226, 1982. Available at SSRN: https://ssrn.com/abstract=1559430

John Prebble QC (Contact Author)

Victoria University of Wellington - Faculty of Law ( email )

PO Box 600
Wellington, 6140
New Zealand
+64 4 463 6311 (Phone)
Papers Indexed at HOME PAGE (Fax)

HOME PAGE: http://www.victoria.ac.nz/law/staff/prebble-scholarly.aspx

Institut für Österreichisches und Internationales Steuerrecht, Wirtschaftsuniversität Wien ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

University of Notre Dame Australia - School of Law

Sydney Campus, New South Wales
Australia

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