High Court reconfirms that backdated ACC weekly compensation is taxed in the year of receipt

In November 2017, the Accident Compensation Corporation (“ACC”) made a gross payment of $188,386.95 (“the ACC Weekly Compensation Payment”) to Ms Hoeberechts. The Commissioner of Inland Revenue (“the Commissioner”) assessed $150,000 of that amount as taxable on a cash basis and taxed the amount in the tax period when Ms Hoeberechts received it, namely the year ended 31 March 2018 (“the Period in Dispute”). On 1 October 2021, the Taxation Review Authority (“the Authority”) dismissed Ms Hoeberechts challenge to her income tax assessment for the Period in Dispute.

Any appeal of the Authority’s decision was required to be filed in the High Court (“the Court”) by 1 November 2021. Ms Hoeberechts failed to file an appeal in the required time and sought the Court’s discretion to extend the time to file. Ms Hoeberechts also sought an order from the Court dispensing with the requirement that she pay security of costs and for the appointment of an amicus curiae. The Commissioner opposed the application.

Tax Information Bulletin Vol 34 No 9 - October 2022