A LAND TAX CASE.

Taranaki Daily News, Volume LIII, Issue 209, 13 December 1910, Page 5

A LAND TAX CASE.

A QUESTION OF LIABILITY. !

By Telegraph.—Press Association. Wellington, Monday.

A somewhat .unusual case waa before Mr. Justice Cooper ,to-day. The White Rock Estate Company proceeded against the Commissioner of Taxes to recover, £2650 tax alleged to be overpaid. The capital of the company was £35,000, and by the sale of property the company, consisting of O. D. Greenwood, George Humphreys, and W. Smale (the two latter hold only one share each), made a profit of £52,001. Defendant claimed that plaintiffs were liable to pay tax on the profit so made, and assessed the iax at £2650, which was paid under protest. Defendant stated thati in Januray, 1905, Greenwood, of Amberley, agreed to purchase from Helen Nicholls 40,608 acres freehold (the estate referred to) near Loburn. At the time of purchase he was* owner of another estate of considerable value, and in order to avoid payment of graduated land tax on the aggregate value of both estates, he determined, it i 8 alleged, to form a private company for the purpose of taking the transfer of the White Rock estate to that company instead of to himself personally. Later the company purchased another, piece of land adjoining the White Rock estate for £2792. Until March, 1908, the lands so acquired were used' for the purposes of a sheep station, and were then sold in eight lots at a profit of £52,061. Defendant held that the profit was made in the ordinary way of business of the company, which was duly assessed for income tax. A similar claim regarding the Marainanga estate is also being heard at the same time.