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Beneficiaries, Beneficiary income, Beneficiary income, Beneficiary rights, Taxation, Trustee income

Who pays the piper?

Under New Zealand’s tax rules, rental income from land belongs to the owner of the
land and it is the owner who must declare the income to Inland  Revenue.   Where the property is owned by a trustee or trustees, this obligation falls on the trustees because, as a general proposition, where a property is held in a trust, it will be only the trustees, who legally own the land, who have an interest in the land. However, where beneficiaries have some interest in the property, the obligations regarding  accounting for income tax can be  less clear.

Two recent QWBAs highlight relevant issues and the need to be clear as to who must account for income arising from the exploitation of trust property, and what deductions can be properly claimed.

References:

 

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