Rewrite Advisory Panel disestablished

The Rewrite Advisory panel was disestablished by the Minister of Revenue in late 2014. See the Minister's announcement on 2 December 2014 for more information.

Inland Revenue will still consider any unintended legislative change issues as part of its remedial work programme. You can continue to submit these on the Rewrite Advisory Panel website.

The content from this site and submitting of unintended legislative change issues will move to taxpolicy.ird.govt.nz in early 2016.

 

Remedial Issues Log

The role of the Panel was expanded in March 2010 to include remedial matters that are not related to the Income Tax Act Rewrite project (see the Minister of Revenue's announcement).

The Panel is only able to deal with specific issues where the Minister of Revenue calls for submissions. These issues do not include matters already accepted on the Government's tax policy work programme.

The Minister of Revenue has called for submissions on these remedial issues:

Remedial issue reference number Remedial issue description Date submissions closed
R-1

Available Subscribed Capital (ASC) on corporate reorganisation (announced 23 July 2010).

3 September 2010
R-2

Beneficiary income of trusts (announced 23 July 2010).

3 September 2010
R-3

Whether the determination of the value of a "benefit" in the Income Tax Act 2007 is a gross concept and whether the Act is consistent in its approach to the issue (announced 3 October  2011).

28 October 2011
R-4

Whether the Tax Administration Act 1994 should allow the Commissioner of Inland Revenue to make a binding ruling in relation to a taxpayer's circumstances for an income year or period of time, despite the taxpayer having already made a self-assessment of a taxation obligation for that year or period (announced 3 October  2011).

28 October 2011
R-5

If the Commissioner writes off uncollectible amounts of tax and makes consequential adjustments to a loss balance from a prior year or years under provisions of the Tax Administration Act 1994, whether the Commissioner should take into account provisions of sub-part CG of the Income Tax Act 2007 in determining the amount of adjustment to the loss balance (announced 3 October  2011).

28 October 2011

Submissions received and their status:

Remedial issue reference number Submission reference number Submission description Status
R-1 R-1-001 ASC on company amalgamations
(Ernst & Young)
Completed - The Panel recommended that any consequential tax issues be placed on the tax policy work programme.
R-1-002 Share for share exchange limitations
(Ernst & Young)
R-1-003 Debt capitalisations
(Ernst & Young)
R-1-004 Cost of acquired shares where the share for share limitation applies
(Chapman Tripp)
Completed - The Panel recommended that any consequential tax issues be placed on the tax policy work programme.
R-2 R-2-001 Distribution of income to charitable trusts as beneficiary income
(Simpson Grierson)
Report has gone to Minister.
R-2-002 Distributions from charitable trusts are not "beneficiary income"
(Simpson Grierson)
Report has gone to Minister.
R-2-003 Treatment of notional income as beneficiary income - (Includes PIE income, FIF income FDR method) Completed - Covered in an interpretation statement.
R-2-004 Can notional income vest absolutely in interest? Completed - Covered in an interpretation statement.
R-2-005 Distribution of losses
(PricewaterhouseCoopers/Ernst & Young)
Completed - Covered in an interpretation statement.
R-2-006 Distribution of imputation credits where losses/expenses
(PricewaterhouseCoopers)
Completed - Covered in an interpretation statement.
R-2-007 Distribution of FDR FIF income
(PricewaterhouseCoopers)
Completed - Covered in an interpretation statement.
R-2-008 Payment of supplementary dividends
(PricewaterhouseCoopers)
Completed - Covered in an interpretation statement.
R-2-009 Gross versus net income issues
(Ernst & Young)
Completed - Covered in an interpretation statement.
R-2-010 Time of derivation of beneficiary income
(Ernst & Young)
Completed - Covered in an interpretation statement.
R-2-011 Allocation of PIE income to beneficiaries of trusts
(Ernst & Young)
Completed - Covered in an interpretation statement.
R-3 R-3-001 Determining the value of a "benefit" in the Income Tax Act 2007, whether or not a gross concept applies and whether  or not the Act is consistent in its approach to the issue
(Ernst & Young)
Completed - see details for R-3-002.
R-3-002 Section CE 1 (IB) of the ITA 2007 should be amended to refer to the "value of the benefit", not "the market value" of the benefit.
(TaxTeam on behalf of Department of Conservation, Department of Labour, New Zealand Defence Force and Wellington City Council)

Completed - The Panel recommended sections CD 5 and CW 45 of the Income Tax Act 2007 be amended as a remedial matter in relation to the term "benefit".

The Minister responded referring the item for inclusion in Inland Revenue's remedial work programme.

The Panel recommended a policy review be undertaken of section CE 5 of the Income Tax Act 2007 in relation to its application to certain life insurance premiums paid by an employer.

The Minister responded referring the item to be considered for inclusion in the tax policy work programme in the future.

The Panel recommended a policy review be undertaken of section CE 11(1) of the Income Tax Act 2007, relating to income protection insurance.

The Minister responded referring the item to be considered for inclusion in the tax policy work programme in the future.

R-3-003 Section CE 1(1B) of the ITA 2007 should be amended to refer to the "value of the benefit", not the "market value" of the benefit. (TaxTeam on behalf of Ministry of Foreign Affairs and Trade) Declined - the submission fell within an existing policy project.
R-4 R-4-001 Considers Commissioner should be able to make a ruling in respect of a taxpayer's circumstances even where the taxpayer has already made a self-assessment for a particular year of period. (NZICA)

Completed - The Panel made two recommendations to the Minister:

  1. A remedial amendment be made to the Tax Administration Act to permit taxpayers to apply, after making a self assessment, for binding ruling on a tax position taken in that self-assessment if the binding ruling sought is consistent with the tax position taken in the assessment.
  2. A policy review of whether a taxpayer should be able to apply for a binding ruling on a tax position taken in a self-assessment, if the binding ruling sought is inconsistent with the tax position taken in the assessment.

The Minister responded that both recommendations raise a number of policy and legislative design questions which should be subject to the GTPP, and should be considered for inclusion in the tax policy work programme when it is next refreshed.

R-4-002 The Corporate Taxpayers Group believes that the provision as currently exists in the Act is not appropriate in the self-assessment environment and requires remedial amendment.
(Corporate Taxpayers Group)
 Completed - see details for R-4-001.
R-5 R-5-001 Consider matters raised involve a number of policy issues requiring wider consideration.
(NZICA)

Completed - the Panel recommended legislative confirmation that remission income arising from discharge from bankruptcy should be taken into account in determining, under section 177C of the Tax Administration Act 1994, the amount of tax debt to be written off and the write-down of tax losses of the bankrupt (if any).

In addition, the Panel recommends that the Tax Administration Act provisions be amended to refer to the no asset procedure contained in subpart 4 of part 5 of the Insolvency Act 2006, and that remission income arising at the termination of the no asset procedure be subject to the same rules as for discharge from bankruptcy.