Lid stays on Trinity investors

The identities of the architect and investors in an alleged $3.7 billion tax avoidance scheme involving some of New Zealand's richest people will remain secret after a hearing in the Court of Appeal in Wellington.

Known as the Trinity scheme, its designer and investors are disputing the Inland Revenue Department's charge of tax avoidance.

The trial, before the High Court at Auckland, has just entered its fourth and final week.

But those involved in the scheme will remain a mystery after a decision in an appeal on the lifting of a name suppression order was reserved by Justices John McGrath, Grant Hammond and William Young yesterday.

It is not known when their decision will be released.

Of about 200 investors involved in Trinity, 13 cases were transferred from the Taxation Review Authority to the High Court as test cases following an agreement with the IRD, the lawyer acting for the investors, Julian Miles, QC, told the court.

There was a fundamental unfairness that a very small portion of the taxpayers involved in the scheme were facing court and the possible publication of their names, he said.

As a taxation matter, the suppression of names should continue until the case before the High Court finished, Miles said.

"Under tax legislation, taxpayers are treated impartially and tax matters must be kept private and confidential."

The prospect of being named had resulted in half of the 13 investor groups pulling out of court proceedings, he said.

The Trinity case was the largest tax avoidance case ever before the New Zealand courts, said James Coleman, lawyer for the IRD.

"In the High Court open justice applies. Ordinary rules under the High Court should apply to tax litigation. The facts here are typical of tax litigation claims and don't warrant special treatment," he said.

Dubbed Trinity by the IRD because of its association with charitable companies connected to the Anglican Church, the scheme enabled investors to get immediate tax benefits on a forestry licence fee, of which the bulk was not payable for 50 years.

Investors could have claimed up to $3.7 billion over the 50-year life of the scheme but legislation blocked off most deductions from the 2004-2005 tax year.


- NZPA