While capital gains tax has been the big tax talking point so far in 2019, there is an equally important development to follow later this year or next in relation to what may amount to tax avoidance.
A tax dispute between Inland Revenue and a New Zealand company in the multinational Danone group is currently progressing through the courts.
If Danone is successful, it could represent a material change in the tax advisory landscape and provide increased commercial certainty for taxpayers and their advisers in relation to tax avoidance matters.
The Court of Appeal is expected to hear the Inland Revenue appeal in the next 12 months following Danone's success in the High Court at the end of 2018.
The case relates to the funding that was provided to a Danone New Zealand company for the acquisition of the Frucor business in 2002. The parties used a cross-border arrangement involving convertible notes which are essentially loans that may be repaid by the issue of shares in certain circumstances.
The current dispute is important given the relative uncertainty that has prevailed in this area for some time for taxpayers and their advisers.
Over the past decade or so, Inland Revenue and professional advisers have often had conflicting views around the application of the Supreme Court decision in the Ben Nevis case which is the leading authority in this area.
Inland Revenue has increasingly asserted tax avoidance exists in the context of arrangements that had historically been regarded as commercially routine and benign.
A good example is the capitalisation of debt to equity for a company in financial difficulty or the introduction of a holding company as part of a corporate group restructure.
The question now is whether the IRD have taken this approach too far by asserting tax avoidance in the Danone case.
The fact pattern is not in the same category as the recent Alesco litigation which also involved the issuance of convertible notes.
As opposed to Alesco, the primary tax advantage from the Danone structure arose offshore and not in New Zealand and the tax deductions being claimed in New Zealand corresponded to actual cash interest payments.
In addition, the use of convertible notes in this case served various commercial purposes as outlined in the evidence given by Danone in the High Court.
If the Court of Appeal rules in favour of Danone, the practical outcome for tax advisers and their clients should be increased certainty in the way business structures and funding arrangements can be established and restructured.
More broadly, it should represent reinforcement of the principle that tax matters can, and should, sensibly be taken into account in business decision-making.
In the interim, while the High Court judgment is helpful for taxpayers, Ben Nevis remains the leading authority in this area.
However, the Danone litigation may very well prove decisive in terms of how the Ben Nevis approach should be interpreted and applied in practice in the future and the relevance of "economically equivalent" arrangements.
So, while the spectre of a capital gains tax has been and gone for the moment, the real tax issue in 2019 is the more intriguing battle over alleged tax avoidance that is set to continue in the coming months.
Greg Neill is a tax partner at Findex Hawke's Bay and can be contacted at firstname.lastname@example.org
This information is general in nature and readers should seek specialist advice before making financial decisions.