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Technical tax area Ngā tūmomo whakataunga me ngā aratohu

Residency: Interpretation of permanent place of abode

Decision date: 18 December 2015

Case: Commissioner of Inland Revenue v Diamond [2015] NZCA 613

Act(s): Income Tax Act 1994/Income Tax Act 2004

Keywords: Section OE 1(1), residency, permanent place of abode


The Court agreed with the High Court's conclusion on the facts and found that Mr Diamond was not a resident for the relevant years. The Court noted that the relevant property had never been Mr Diamond's home (and was never intended to be): it was never lived in by Mr Diamond and was only ever used as an investment property. The Court did not accept that a place in which Mr Diamond had never lived could constitute a dwelling with which he had enduring and permanent ties.

Case impact statement

The Court disagreed with the Commissioner's approach to the issue of how to interpret the phrase "permanent place of abode". The Court considered that a permanent place of abode means something more than mere availability of a place to stay and implies actual usage of the property by the taxpayer for residential purposes.The Court went on to conclude that what is required is an overall assessment of the facts and that this assessment cannot be separated into discrete questions. Rather, the approach calls for an integrated factual assessment directed to determining the nature and quality of the use the taxpayer habitually makes of a particular place of abode.

The Commissioner is currently reviewing her Interpretation Statement (IS 14/01) Tax Residence in light of this judgment and will consult on any proposed changes.


The Interpretation Statement (IS 14/01) has now been reviewed and replaced by Interpretation Statement (IS 16/03).

Find out more about Interpretation Statement (IS 16/03)


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