BNZ must wait for six weeks to learn its fate in fight with IRD

The judge who heard the first of Inland Revenue's so-called "structure finance" multibillion-dollar tax cases against the major banks expects to come up with his judgment in about six weeks.

The IRD has been facing off against the BNZ bank in the High Court at Wellington for the past 14 weeks over a series of deals the BNZ entered into between 1998 and 2005.

The IRD has issued amended tax assessments in relation to the BNZ's deals totalling $416 million and as at March 31 had added a further $223 million in interest to the bill.

That is aside from any penalty the court may impose if it finds against the bank.

A spokesman for the BNZ yesterday said the judge had indicated he hoped to have a judgment in six weeks.

The other major banks are also facing similar charges with the level of contingent liability for Westpac being $850 million, ANZ National $554 million and ASB $291 million.

The IRD alleges the banks exploited legislation intended to encourage overseas investment to borrow money from their parent and claim an interest deduction, while producing little or no taxable income in New Zealand.