The taxman waits for no-one, creating some tension between Inland Revenue collecting taxes for that big bucket which is consolidated revenue available for government general expenditure when Police might be chasing the same assets for a separate proceeds of crime fund controlled by the Justice Department.
Protesting that she is innocent of any part in a commercial cannabis cultivation business, Nhu Quynh Thi Le gained High Court approval for release of frozen funds to pay a tax bill following sale of her Auckland investment property.
The High Court was told Ms Le purchased in 2018 a house at Goodwood Heights near Totara Park in South Auckland. An August 2020 police bust found all rooms in the house, bar one, kitted out for commercial cannabis cultivation. Ms Le denies all knowledge. The house was rented out. The tenant was responsible, she says.
Ms Le sold the house at auction three months later. Police had the $347,000 net proceeds of sale frozen, alleging the property was ‘tainted’ under proceeds of crime legislation.
Meanwhile, Inland Revenue assessed Ms Le liable to pay tax of some $49,500 on the $165,000 capital gain made during her two year’s ownership.
Evidence was given that Ms Le paid part of this tax bill from her own resources, but required $35,200 from her frozen funds to pay the balance.
Confirming an agreed Criminal Proceeds (Recovery) Act settlement between Ms Le and Police, Justice Johnstone approved release of $35,200 in payment of Ms Le’s tax bill plus a little over $14,000 to be returned to Ms Le personally. The balance is forfeit.
Police alone do not get to use all the millions collectively forfeited to the proceeds of crime fund; other beneficiaries have included Justice, Health, Social Development, Customs and Oranga Tamariki. Ministries seeking to dip into the pot must establish funds received will reduce social costs of crime.
Commissioner of Police v. Le – High Court (24.06.24)
24.161