Case Number: 2663

Council Meeting: MAY 2018

Decision: Not Upheld

Publication: Stuff

Ruling Categories: Accuracy
Comment and Fact


1. Perry Spiller complains that a Stuff article of 15 February 2018, subsequently also published inThe Dominion Post and The Press, breaches the Media Council’s principles of Accuracy, Fairness and Balance (Principle 1) and Comment and Fact (Principle 4).The Stuff piece was headed “More investment property sales to be stung with capital gains tax.”

2.The article was about the Government seeking to extend the amount of time for which investment properties must be held before their owners can avoid a capital gains tax.The complaint centres on what is a capital gains tax liability and whether its portrayal of it in the piece was inaccurate.

The Complaint

3. Mr Spiller argues that the new bright-line test will create an income tax liability in certain circumstances.Not a capital gains tax liability.The IRD website is clear – there is no capital gains tax in New Zealand and so the headline banner and subsequent piece is false, deceptive and / or misleading.

4. Mr Spiller notes that the headline would be more accurate if it said “…avoid paying income tax on any capital gains.”

5.Any appeal by Stuff to popular belief or previous custom of certain interpretation does not change the fact.In New Zealand there is no capital gains tax.

The Response

6. Ellen Read responded initially to the complaint.This was followed up with a formal response from Roeland van den Bergh.Stuff argues that Oxford Dictionary definition of capital gains tax is “a tax levied on profit from the sale of property or an investment.”Technically there is not a comprehensive CGT, the Government taxes the capital gains in situations captured by the bright-line test.It is therefore accurate for the headline to refer to the tax as a CGT because it effectively is – headlines are often abbreviated or simplified to terms people / readers understand.

7.Use of the CGT term was informed by past reporting and discussions with various tax and economics experts who have no doubt that the bright-line test is in effect a CGT.Stuff’s response notes the views and opinions of tax experts to reaffirm their view.The use of the headline and the term within it was therefore reasonable in the circumstances and doesn’t breach the Media Council principles.

8. However, Stuff does recognise Mr Spiller’s distinction.The story was amended to achieve the distinction Mr Spiller raises, the issue was discussed “extensively” and relevant reporters were briefed on the distinction.

The Discussion

9.The complainant notes the accurate description is: “it’s income tax on any capital gains.”Stuff argues that CGT is a term used previously in similar circumstances and therefore understood by its readership.It provided expert advice to back up its point.It seems the use of the term has become practice or custom for Stuff.

10. While New Zealand does not have a capital gains tax it does tax capital gains. Whether you can accurately use the label in New Zealand is as much political as it is technical and there has been much political debate over whether the brightline test amounts to a capital gains tax. It's not for the Council to make political distinctions.

11. We do note that for the non-expert reader there is no difference between a capital gains tax and a tax on capital gains.

12.Stuff did amend the story to include a sentence which noted that New Zealand does not have a comprehensive capital gains tax which, in the Council’s view, satisfactorily explains the point made by the complainant.The Council also notes the briefing of relevant reporters and extensive discussions within Stuff around the issue.It’s through that, the Council believes a new practice in Stuff’s reporting might take hold which recognises the distinction made by Mr Spiller.

13.The complaint is therefore not upheld.

Media Council members considering the complaint were Chris Darlow, Liz Brown, Craig Cooper, Tiumalu Peter Fa’afiu, Jenny Farrell, Hank Schouten, Marie Shroff, Christina Tay, Tracy Watkins.

Tim Watkin stood down to maintain a public member majority.


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