Banks fight IRD for $8m

Westpac, BNZ and ANZ National are taking the Inland Revenue Department to the Supreme Court in a bid to hang on to about $8 million in unclaimed funds the IRD says belongs to the Crown.

Under the Unclaimed Monies Act, funds left untouched in bank accounts for more than six years must be paid to Inland Revenue.

However, the banks contend they should retain those funds associated with approximately 1 per cent of bank cheques issued which remain undrawn after that period, and undrawn foreign currency drafts.

The High Court and Court of Appeal have both found against the banks in hearings over the past three years.

This month the three banks, all of which are challenging the IRD over contested "structured finance" tax bills which dwarf the sums involved, were granted leave to take their case to the Supreme Court.

An IRD spokeswoman said the "core sum" involved was about $7.8 million.

"It is Inland Revenue's view that such funds are unclaimed money and should go to the Crown."