A focus on topical tax issues - June 2015
CIR v Trustpower Ltd: Unfeasibility expenditure
Hopes for a turning of the tide may have been high in the wake of Justice Andrews’ refreshingly practical and commercially-minded High Court (“HC”) judgment for the taxpayer in Trustpower Ltd v CIR - not to mention the other recent taxpayer win in Vector Ltd v CIR.
Unfortunately, the Court of Appeal (“CA”) has dashed those hopes in ruling against the taxpayer by allowing the Commissioner’s appeal in Trustpower. In delivering judgment for the Court, Justice White has held that $17.7m outlaid by Trustpower in applying for various resource consents relating to four potential electricity generation projects in the South Island was non-deductible capital expenditure.