Dunbar, David2007-08-072022-07-052007-08-072022-07-0520052005https://ir.wgtn.ac.nz/handle/123456789/18546The judgment of the Privy Council in the recent Peterson case highlights the difficulty of deciding whether a general anti-avoidance rule should apply to set aside for tax purposes a passive investment structure which sought to take advantage of a number of unrelated provisions in the Income Tax Act 2004 (ITA). The taxpayer invested in a film known as Lie of the Land which was a commercial failure. The film was never released yet the tax system not only underwrote the taxpayer's investment, but it also enabled him to make a cash profit from what could be fairly described as a financial disaster. The financial success or failure of the investment (post tax) turned on whether the courts were prepared to allow the Commissioner of Inland Revenue (CIR) to apply the general anti avoidance rule to cancel the cash profit made by the taxpayer. That case is the motivation for this working paper.pdfen-NZTax avoidanceFinancial gainInvestment outcomeText