The tax burden on high-income individuals in New Zealand has created a demand for investments, commonly known as tax shelters, which produce tax losses. The creation and exploitation of tax losses is an integral feature of these schemes and enables investors to enjoy a positive return whether or not the underlying investment is a commercial success. These schemes are of concern to legislators and tax policy advisers for two reasons: (i) if left unchecked, the schemes could pose a significant threat to a country's tax base, and (ii) incentives are created for investing in certain sectors based solely on tax considerations rather than the usual commercial criteria. New Zealand recently responded to these schemes by enacting anti-avoidance provisions to deal specifically with what the government calls "mass-marketed tax schemes". This article outlines and reviews the new anti-avoidance provisions.