THE PROPERTY TAX.

Wairarapa Daily Times, Volume 6, Issue 1647, 29 March 1884, Page 2

THE PROPERTY TAX.

IMPORTANT JUDGMENT.

The following important decision has recently been.. given' by the Resident 1 Magistrate of Dunedin upon a question raised between the British and New Zealand Mortgage and Agency Company (Limited) and the: Property Tax Commissioner. Mr Jame3 Smith appeared for the Company, and Mr B. C. Haggitt for the "The question I have to decide is whether the Company making this objection is liable to be assessed, for property tax upoii the sum of £60,000, representing the price at which it pur-,

chased-and'Rabies.the goodwill of its business, and'the question has to be considered under two heads. First, whether a goodwill is property liable to be assessed under the Property Assessment Acts; secondly, if goodwill is not property ordinarily liable to be assessed, does the Company become liable from the fact'that there is l an entry in its balance-sheet showing the goodwill entered as having a value of £60,0001 The difficulty,'l find, in the case is whether goodwill is property within the meaning of the said Property Assessment Acts, ' It seems sometimes to have been recognised as property, but not always so, : In 'Smith's Mercantile Law,' 9th edition, title—Goodwill, I find' There is another sort of property, if property it can be called, which is often recognised in courts of equity as an existing, and valuable interest,' This implies a doubt whether goodwill is properly called 'property;' I thinkj if the Legislature had intended goodwill to be taxable property, that it would have made clear that it was so intended, and some specialprovision would have been made for its valuation. Under the second proposition' it has been contended that the effect of section C of the Act of 1881, and section 14 of the Act of 1883, is to make the entry of the goodwill in the statement of the Company's asset 3 conclusive evidence of that asset to the value of that set in that entry, There seems to me to be nothing in the Acts which goes to show an intention to make companies' liable for assessment where individual traders would not be, or_ vice versa. And, therefore, the object of the sections referred to must doubtless be to assist the Commissioner in finding facts as to the value of taxable property, but not to inako exempt property or an interest not taxable liable to taxation, ; For instance; in the case of a shipping company the bulk*& its property would probably be its ships, the balance-sheets would show the value of those vessels in its assets, but surely this would not render the exemption of vessels from property tax nugatory, If goodwill was taxablo property, then I would take the entry as conclusive against the Company that its value was, as stated in the balancesheet, £60,000 ; but I don't take it as conclusive that it is taxable property. To put it shortly, I think the intention to be that a company's balance-sheet as against that company is conclusive as to fact, but not upon any question of law that can be raised upon that fact. In my opinion the Company is not liable to be assessed upon the amount of £60,000 objected to."