Uncertainty remains with capital gains tax
Price Waterhouse financial services tax partner Declan Mordaunt says confusion reigns on the issue of capital gains tax on share sales.
Monday, October 6th 1997, 12:00AM
A decision by the trustees of the Alexander and Alexander Pension Plan not to appeal a High Court decision relating to tax on capital gains has clouded the whole issue, Price Waterhouse tax partner Declan Mordaunt says."The taxation on gains on sale of shares is perhaps more confused than it ever has been."
On one hand the Privy Council ruled that investment company Rangatira didn't have to pay tax on gains it made, while the High Court decided the Alexander superannuation scheme was subject to tax on gains.
Mordaunt says there is little doubt the Inland Revenue Department is intending to take further cases to court with a view to establishing some certainty on the issue.
He says work is underway preparing a number of cases which will hopefully bring some more clarity to the issue.
However, the picture will never be totally clear as each case will be decided on its merits and its own facts.
The other option to solving this major problem is legislative reform, however Mordaunt expects politicians to file that solution in the too hard basket.
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