Tax Information Bulletin - August 2026

The Arrangement is a mortgage offset product known as the Plus Offset Home Loan, which Bank of China (New Zealand) Limited offers to eligible home loan customers.  Interest is calculated on the net balance of the home loan after offsetting the credit balance of a linked Offset Savings Account, reducing the interest payable. The Arrangement is restricted to the home loan customer(s), and the Offset Savings Account must be held under the same legal ownership.  It cannot be linked to, or used by, family members or other third parties.

This product ruling applies to the engagement of distributors by Reach Media to physically deliver unaddressed mail (e.g. newspapers, circulars, leaflets, brochures, catalogues, advertising material, samples) from drop-off locations to households and other premises throughout New Zealand.

This product ruling applies to the engagement of drivers by Reach Media to transport unaddressed mail (e.g. newspapers, circulars, leaflets, brochures, catalogues, advertising material, samples) from Reach Media’s premises to predetermined drop-off locations.

This product ruling applies to the engagement of supervisors by Reach Media to provide certain supervisory services in metropolitan and rural areas in relation to the delivery of unaddressed mail (e.g. newspapers, circulars, leaflets, brochures, catalogues, advertising material, samples).

The Arrangement is the payment of scholarships by the Pacific Education Foundation to eligible tertiary students under the Tulī Takes Flight Scholarships and Pacific Education Foundation Scholarships programmes. The scholarships are awarded to New Zealand citizens of indigenous Pacific heritage to support their tertiary education in New Zealand. The Ministry of Education funds the scholarships.

To the extent a scholarship payment the Pacific Education Foundation makes to a student under the Arrangement is income, it is exempt income of the student under s CW 36 of the Income Tax Act 2007.

Under s YB 21, if a person holds something or does something as a nominee (including as a bare trustee) for another person, the other person is treated as if they hold or do that thing, and the nominee is ignored for tax purposes. Where a bare trust exists, the trustee’s only duties are to transfer the trust property as the beneficiary directs and, in the meantime, to take reasonable care of the trust property. This question we’ve been asked (QWBA) considers whether a bare trust can exist where the property held has a mortgage over it.

This item replaces IS 23/02: Income tax – Application of the s CZ 39 5 year bright-line test to certain family and close relationship transactions to the extent the interpretation statement is not consistent with this QWBA. This is discussed in more detail at [19].

Xiaoquan Jia (Mr Jia) applied to judicially review the decision of the Commissioner of Inland Revenue (the Commissioner) declining to consider Mr Jia’s application under s 113 to amend his tax assessments for the 2014, 2015, and 2016 tax years. 

Mr Jia did this despite the Taxation Review Authority (TRA) having found the assessments to be correct in unsuccessful challenge proceedings brought by him under Part 8A of the TAA. 

The Court found issue estoppel applies. The decision of the TRA is a final decision of a court of competent jurisdiction as to the correctness of the Commissioner’s assessments. The TRA determined that the assessments are correct. Therefore, it is not open to Mr Jia to argue in this (or any other) proceeding with the Commissioner that the assessments are not correct.

The Court held that the Court of Appeal’s decision in Charter Holdings is clearly distinguishable from the present case. In Charter Holdings, the fact the taxpayer failed to invoke the disputes and challenge process meant there was no court decision regarding the impugned assessments. In contrast, Mr Jia has gone through the disputes and challenge process resulting in the decision of the TRA.

Podium Investments Ltd (Podium) sought to deduct approximately $460,000 of seismic strengthening expenditure and $1.5 million of ground-floor glass façade expenditure incurred as part of a major refurbishment of a commercial building, located in Hamilton. The High Court dismissed Podium’s appeal of the Taxation & Charities Review Authority (TCRA) decision which found in in favour of the Commissioner, holding that both categories of expenditure were capital in nature because they formed an integral part of a wider project that transformed a seismically sub-standard retail building into a modern, compliant office building.  The High Court also found that on a standalone basis, the works independently resulted in significant improvements to the building’s character, functionality and value.

L (the taxpayer) sought deductions for education expenses, motor vehicle expenses, and home office expenses. The taxpayer also challenged the Commissioner’s imposition of a shortfall penalty for not taking reasonable care.

The Authority denied the deductions sought on the basis that the deductions were not incurred as part of the taxpayer’s business, the taxpayer had failed to keep adequate records or otherwise show the deductions had been incurred, or the deductions had been incurred prior to the taxpayer’s registration for GST. The Authority agreed that the taxpayer had failed to take reasonable care in taking the tax positions.

This item summarises a private ruling about the income tax and PAYE treatment of various employee allowances paid under employment agreements, including whether those allowances are exempt income to employees and whether the payer has PAYE withholding obligations.

This item summarises an adjudication that considered whether the sale of property was subject to s CB 6 of the Income Tax Act 2007 and whether the Taxpayer was liable for a shortfall penalty for gross carelessness or taking an unacceptable tax position.

This item summarises a private ruling that considered whether an agreement for the supply of products is a “short-term agreement for sale and purchase” and therefore an excepted financial arrangement.