Tax cases

Rights to trademark

The trustees of two family trusts in New Zealand sold residual rights in a company name and trademark to another company on the basis that the trademark would remain the property of the trustees for seven years. The trustees claimed depreciation for two tax years. The Commissioner of Inland Revenue said that the trustees had granted an exclusive right to use the trademark for the seven-year period and this argument was accepted by New Zealand's courts so the trustees appealed to the Privy Council.

The Privy Council said that the trustees' claim failed as during the seven-year period they had not owned any depreciable intangible property. The right to use trademarks was depreciable intangible property but during the seven years that right had belonged to exclusive licensees.

The trustees' appeal was dismissed.

(Trustees in...