A.M.P. TAX APPEAL

Press, Volume C, Issue 29638, 7 October 1961, Page 5

A.M.P. TAX APPEAL

Judgment Reserved (N.Z. Press Assn.—Copyright) LONDON, October 6. Judgment has been reserved on the income tax appeal by the Australian Mutual Provident Society, of Sydney, relating to the method .of arriving at the society’s New Zealand profits for 1955, being heard by the Judicial Committee of the Privy Council. In the appeal, brought from a decision of the New Zealand Supreme Court in favour of the Crown, the society contended that a sum of £1,752,083 which was treated by the Commissioner of Inland Revenue as being the allotment of surplus funds by way of reversionary bonuses in respect of the New Zealand business, was not the true cash value of the reversionary bonuses.

The reason the society gave was that as the sum was the result of the net premium method of valuation, it included something of the character of an internal reserve.

The society declared its surplus funds for the year at £1.409.210, which the commissioner declined to accept.

The Solicitor-General of New Zealand. Mr H. R. C. Wild, Q.C. (for the commissioner) said the society’s annual report for 1955 showed that £8.738,779 was the surplus by way of reversionary bonuses in respect of the whole of the society’s business. This Included the higher figure in respect of the-New Zealand surplus.

Another part of the appeal was concerned With amounts properly deductible from the profits, the issue turning on the construction of the Land and Income Tax Act, 1954.