Matthew Backhouse

Matthew Backhouse is a journalist based in Auckland.

Sir Robert Jones wins $4.29m tax dispute

Sir Robert Jones. Photo / supplied
Sir Robert Jones. Photo / supplied

Sir Robert Jones has again come out on top in a $4.29 million tax dispute with his former accountants.

The High Court last year found accountancy firm Sherwin Chan and Walshe (SCW) was liable for losses that Sir Robert and a corporate trustee incurred due to negligent tax advice during a 2007 restructure.

The firm had failed to consider the impact of foreign-controlled company rules on the restructure, which included an Australian company _ an oversight that was not discovered until Inland Revenue audited Sir Robert's companies in 2008.

Sir Robert claimed he would not have gone ahead with the restructure had he known about the extra tax liability.

SCW has accepted it was responsible for $3.45m of the $4.29m tax liability, but appealed the rest of the damages in the Court of Appeal.

It argued Sir Robert's trust had unnecessarily incurred an extra tax liability due to unreasonable, negligent or wrongful advice from its new accountants, Ernst and Young.

SCW also argued the trust obtained a benefit from the restructure that completely offset its total tax liability.

But the Court of Appeal dismissed the appeal on all grounds - which means SCW must still pay $4.29m in damages plus almost $900,000 in interest on the tax bill.

The firm, which is now known as WHK New Zealand, must also pay Sir Robert's costs to defend the appeal.

- APNZ

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