Abstract:
This article considers a number of interrelated issues that determine the role of New Zealand’s General Anti-Avoidance Rule (GAAR) (ss BG 1 and GA 1 of the Income Tax Act 2007 (ITA 2007)) in taxation law jurisprudence. The rst issue relates to the interplay between the GAAR and speci c statutory provisions. The second issue pertains to the interpretation of tax provisions, including more speci cally the application of the GAAR itself. The answer to these issues will ultimately determine the continuing relevance of, inter alia, the Duke of Westminster principle. To date, despite the enactment of the New Zealand GAAR, this doctrine has continued to be a pivotal principle in taxation law jurisprudence. In turn, this has meant that the New Zealand GAAR has been ineffective to deal with blatant avoidance schemes that have been purposely structured to fall within the formal parameters of a speci c provision. It is contended that recent decisions of the newly constituted New Zealand Supreme Court indicate that if the Duke of Westminster principle is not dead, he should be “very careful when he crosses the road” in New Zealand. Nevertheless, it is ultimately suggested that the continuing uncertainty of the role of the New Zealand GAAR is unfortunate and legislative clari cation is warranted.
