Ross investors can claim 8 years' excess tax
Swindled David Ross investors will now be able to claim back eight years of overpaid tax after the Inland Revenue Department concluded they had made a "clear mistake or simple oversight" on fictitious investments.
Inland Revenue in November detailed how investors in Ross Asset Management could have tax returns from 2008 on reassessed.
It followed a proposal from Inland Revenue on March 19 last year, which said possible tax refunds were being considered for tax paid in relation to what has since emerged to have been fictitious investments.
Lower Hutt-based Ram operator David Ross, 63, was last year sentenced to 10 years and 10 months in jail for operating the scheme which robbed investors of at least $115 million.
He has since appealed his minimum non-parole period of half this sentence.
Before the period was extended to eight years, Ram Investors Group head Bruce Tichbon estimated the total refund could be worth between $15m and $20m, as liquidators revealed Ross Asset Management portfolios were overstated by more than $300m in 2012.
The Income Tax Act limited Inland Revenue's ability to refund tax to a four-year timeframe, which could be extended to eight years if investors could prove they had made a "clear mistake or simple oversight" in paying tax on earlier years.
Yesterday a letter from Inland Revenue to liquidator PwC said a legal analysis of the Ram situation had concluded investors "made a clear mistake or simple oversight" calculating their Ram income.
"Accordingly, it has been concluded that the four year timeframe during which the Commissioner is able to refund overpaid tax is able to be extended to eight years in the Ram context."
Brent Gilchrist, a 30-year tax specialist who worked for Inland Revenue for 10 years, had previously questioned Inland Revenue's initial refund offer, saying it was not as generous as it sounded.
Ram investors were also considering legal action over what they said was "paying tax for being robbed". This could result in either a "test case" or possibly a class action.
Victoria University law professor John Prebble, had said that whether investors had made a mistake, and as such would be entitled to refunds of eight years, was a matter of statutory interpretation.