Despite personally owning no property in New Zealand and spending on average eight months a year at sea, China Navigation captain Gerardus van Uden was held to be a tax resident, liable for tax in New Zealand on his world-wide income and on his employer-funded superannuation.
Mr van Uden claimed his permanent place of abode was overseas and that his stays in this country were purely transitory. The Court of Appeal said whether a person is tax resident in New Zealand is a question of fact, turning on each individual’s circumstances.
Mr van Uden filed New Zealand income tax returns up to the 2004 tax year in which he declared approximately half his salary as taxable, declared no taxable income for the next two tax years then filed non-resident tax returns for years 2007 – 2009. This triggered a tax audit for the years 2005 – 2009. He said his ‘place of abode’ was no longer New Zealand; it was wherever he might be at any one time.
The Court of Appeal ruled New Zealand was still his abode, on an objective view. Evidence was given that rental properties managed by Mr van Uden were in New Zealand, together with a family home at Cockle Bay in Auckland’s eastern suburbs. He did not personally own these properties; they were previously owned separately by Mr van Uden and his spouse before being transferred into a family trust. Cockle Bay had been let out as a short term let, but kept available whilst he was in the country. Cockle Bay was described as ‘own home’ in a mortgage application. The Cockle Bay address was used for all correspondence: bills, bank statements, insurance and investments. Motor vehicles were registered to the address. He paid for a Sky television service at the address.
Inland Revenue was justified in charging a ten per cent penalty on the basis Mr van Uden had taken an ‘unacceptable tax position’, the Court of Appeal ruled.
van Uden v. Inland Revenue – Court of Appeal (8.11.18)
18.222