This book is only available in PDF format

Published: 16 September 2009
Pages: 57 pages

Introduction

Legal practice in recent decades has changed greatly, in part driven by increasing complexity in the legal regimes we work with.

Many areas of practice have undergone a paradigm shift in recent decades. The shift is usually accompanied by both a change in the underlying conceptual model, enforced by both a more complex legal structure, and a factual complexity added a body of professional expertise (and often technology).

A good example is the move from Town and Country Planning to Resource Management. The new Act in due course gave rise to a specialist court, and a new sophistication of analysis from the planning profession.

The increasing bulk of the Income Tax Act evidences the change in Tax law. The prints of Act in the late 1800s were small; now the Act is bulky and comprehension aided with diagrams and formulae. Importantly, with harsh penalties for taxpayers who unwittingly “get it wrong”.

In the late 1980s tax law in New Zealand changed substantially; there was a series of complex regimes introduced, and they impinge on many areas of commercial practice. The most ubiquitous of them being GST; but there were others such as a new international tax regime, and what was then known as the accruals rules (now financial arrangement rules).

Tax is an issue in virtually all commercial transactions. It is a core skill for a commercial lawyer to be aware of tax issues, or at least when to get input on whether there are issues to be concerned about. It is comforting to think common sense should alert you to when there is a potential problem. The reality is that common sense is not a reliable guide. It may sound glib, indeed bordering on the facetious to say that. But, the tax regime is not a coherent or consistent body of principles. There are many aspects that are arbitrary, and some deeply counter intuitive.

The purpose of this seminar is to try and alert you to pitfalls you should know about; but also to further develop the sense of when specialist input is needed.
Increasingly we are entering an era when commercial, and even family transactions, need a tax “sign off”. It is a salutary lesson to see what happens when a practitioner transfers a lifestyle block to other family members with a gifting programme, thinking the client was not GST registered. When the accountant picks up the problem at the end of the year, there is no simple way of dealing with the problems. They include recovered depreciation, GST complexities in a related party transaction, penalties and interest.
We have tried to identify some of the more common traps we see, but we cannot hope to be comprehensive. We are more than happy to deal with issues raised during the presentation.

Our aim is to give you confidence in dealing with potential tax issues that may arise in your work; through developing a sense of the major traps, and knowing when you need a tax sign off. You cannot be expected to practise with a sense of foreboding about being caught out by “not knowing what you do not know”.