27 Jul 2016

Trustpower loses $17m battle with IRD

4:26 pm on 27 July 2016

New Zealand's fifth biggest electricity company has lost a $17 million battle with the Inland Revenue Department after taking its fight all the way to the Supreme Court.

Pipelines to Trustpower power station at Coleridge in Canterbury.

Trustpower's power station at Coleridge, Canterbury Photo: PHOTO NZ

The decision has led to a suspension of trading in Trustpower shares on the NZX.

The money had been spent on legal and other costs associated with getting resource consent for four power schemes.

In the end, part of one scheme was completed; the other three were put on hold.

Trustpower argued the costs of filing the resource consent applications were business expenditure and so should be tax deductible.

It won that claim in the High Court but the ruling was overturned by the Court of Appeal.

The Supreme Court has now upheld that position, saying this was capital expenditure, not business expenditure, and so could not be offset against tax.

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