TAX ON LEASEHOLD LAND

New Zealand Herald, Volume LXXV, Issue 23162, 7 October 1938, Page 14

TAX ON LEASEHOLD LAND

INTERPRETATION OF ACT INTENTION AS TO DATE [BY TELEGRAPH —PRESS ASSOCIATION] WELLINGTON, Thursday An action brought in the nature of a test case to determine the interpretation of a point in the Amendment Act, 1936, which made land tax payable by lessees in respect of their leasehold properties as if they were freehold, was decided by a reserved judgment delivered in the Supreme Court to-day by Mr. Justice Reed. The case involved much property and a considerable amount of taxation. The parties were the Do Luxe Theatre Company, Limited, and tho Commissioner of Taxes. The Amendment Act came into force on October 6, 1936, but was expressly made retrospective to April 1. As land tax is assessed and levied in respect of land owned by the taxpayer at noon on the preceding March 31, the question arose as to whether taxpayers holding land on March 31, 1936, were liable to tax for the year beginning on April 1. The company argued that in that case the amendment should have been made retrospective to March 31, 1936. The Commissioner contended that the intention of the Act was sufficiently clear by implication to include anyone owning leasehold land on March 31. 1936.

His Honor said tho question resolved itself into whether the legislature had sufficiently expressed its intention that the amendment should apply to the position as existing on March 31, 1936. He thought it had, first, because the amendment was declaratory, and second because the general scope and purview of the amendment was to make it applicable to leasehold land hold on March 31. 1936. The Commissioner's assessment was confirmed.