Van Uden v CIR - Itinerant sea captain has permanent place of abode in NZ
The Court of Appeal has emphasised that whether or not a taxpayer has a permanent place of abode in New Zealand is decided by an objective, integrated factual assessment, and not by the intention of the taxpayer.
Captain Van Uden worked for a shipping line. He came and went from NZ regularly. While he was here, he stayed in a home originally owned by his wife and subsequently held in trust for her. That trust was effectively extended to include Captain Van Uden, because he was added as a trustee and beneficiary. His son was also included as a beneficiary. He asserted that he did not regard the property as a home but simply a convenient place to stay while in NZ to manage property investments here, including the relevant property. Moreover, he asserted that he and his wife had closer intended ties with the Netherlands than NZ.
The Court concluded that the required objective analysis did not support Captain Van Uden’s argument. The frequency with which Captain and Mrs Van Uden occupied the property and the pattern of expenditure associated with their times in NZ at the property reflected the normal pattern of domestic expenditure. Both husband and wife had elderly relatives in NZ and they looked after them while living in the property during their times here. These factors emphasised the ongoing family connection Captain and Mrs Van Uden had with NZ and with the property in which they stayed.
The Court emphasised evidence that showed that the Van Uden’s used the property as their home in NZ rather than simply as a base for property management. Thus, a Sky TV subscription for the property and loan applications referring to “own home” pointed to the property being the taxpayer’s home while in this country. The property was also the registered address for motor vehicles used by the taxpayer and his wife when in NZ. Moreover, apart from a short informal arrangement, the property was never let and remained available to Captain Van Uden and his wife at all times during the relevant years.
The Court examined and ticked off each of the factors identified in Diamond (see case note). It made it clear that trust ownership should not obscure what was really going on and that a person does not have to own property for it to be their PPoA. What is required is a place in NZ at which the person habitually, and with the required element of permanence and continuity, is able to and does abide.
This appeal followed decisions by the TRA and the High Court that found a PPoA to exist. The taxpayer’s argument seems to have been based on the fact that the extent of his coming and going from NZ meant that the connection with the relevant property lacked the required degree of permanence. It seems also to have been based on the argument that a business purpose explained his presence at the property rather than a domestic purpose such as would suggest a home (and therefore a PPoA).
The Court’s decision shows that even an itinerant person who comes and goes from NZ regularly can have a PPoA here if their recourse to a place in this country is sufficiently regular and has the hallmarks of domesticity for it to be regarded and their home whilst in NZ. In this case Captain Van Uden was In NZ for periods as short as 6 weeks in one income year and as long as 5 months in another. In two of the 5 years under challenge, he was here for 4 months. This emphasises that the length of time in the country is but one factor to be considered and, if that is spent here with a pattern of behaviour that speaks of domesticity, a PPoA may be established.
© G D Clews, 2018