KEY POINTS:
The Trinity tax-avoidance case is before the Supreme Court, 11 years after the forestry scheme was first designed.
After both the High Court and Court of Appeal ruled the scheme was tax avoidance, parties including one of the scheme's architects appealed to the country's highest court. The hearing is set to run all week.
Inland Revenue has said if the scheme had been allowed to run its 50-year course, up to $3.7 billion of tax revenue would have been at risk.
Trinity has been by far the IRD's largest tax-litigation success to date.
In 1997 up to 300 investors in Trinity bought a 50-year licence to grow Douglas fir trees on land owned by the Trinity Foundation companies.
They agreed to pay a $2 million per hectare licence fee in 2047, when the trees were harvested. But in the meantime they claimed immediate deductions on the fee.
Investors also claimed the cost of a British Virgin Islands-based insurance policy, which was part of the scheme.
Those taking the case to the Supreme Court include lawyer Clive Bradbury, one of the scheme's architects, and Gregory Peebles, head of Westpac's asset management group.
If the plaintiffs ultimately lose the case they will have to repay the tax, plus pay interest on that money and 100 per cent shortfall penalties.
