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Income Tax

New trust reporting obligations

The Taxation (Income Tax Rate and Other Amendments) Act 2020, which was introduced on 2 December 2020 and enacted on 7 December 2020 following Royal Assent introduces new disclosure requirements for trusts. The Commentary to the Bill explains the new disclosure requirements at pp 18 to 19 as follows:

Detailed analysis

Information required to be provided

The Bill would require financial accounting information to be provided by trustees on an ongoing basis. This would include:

• profit and loss statements

• balance sheet items, and

• other information to be specified by the Commissioner (for example any transfers to the trust by associated persons).

The Commissioner would prescribe additional information relevant to trusts which must be provided as part of the return information, such as loans to or by related parties.

Trustees would also be required to provide information on distributions and settlements made during the income year and include that in their return.


For distributions, the information required would include identifying information for beneficiaries such as their name, IRD number and date of birth. This is set out in proposed section 59BA(2)(d) [of the Tax Administration Act 1994].

The information required for distributions is similar to the information Inland Revenue collects about beneficiaries as part of the current tax return process, where there is an allocation of income to the beneficiary.

The Commissioner may require other information relating to distributions to be reported, which could include, for example, the source of the distribution.


The information required for settlements over the year would include identifying information for settlors such as name, IRD number and date of birth, as well as the amount and nature of each settlement. In addition, it is intended that for the 2021–22 return year, trustees provide names and details of settlors from prior years. This is achieved in proposed section 59BA(2)(c) by requiring details for those settlors whose details have not previously been supplied to the Commissioner.

Inland Revenue does not currently collect information on subsequent settlements on a trust. This is an information gap which means that Inland Revenue is not capturing information on the true settlor. This is a key piece of information, as New Zealand has a settlor-based trust taxation regime.

Other relevant persons

Proposed section 59BA(2)(e) would require trustees to provide information on those with the power under the trust to appoint or dismiss a trustee, to add or remove a beneficiary, or to amend the trust deed.

Requiring this information is necessary as “appointers” or those with power to amend the trust deed would not be disclosed otherwise. The reference to the power arising “under the trust” is intended to ensure this does not capture beneficiaries where they have one of the above powers only if all beneficiaries agree.

This would form part of a trustee’s annual return requirements and therefore existing penalty provisions would apply as appropriate, if the information is not provided or false information is provided. No additional or specific penalty is proposed.”



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