Domestic Trust Reporting

The Taxation (Income Tax Rate and Other Matters) Act 2020 enacted on 7 December 2020
a introduced a new top personal tax rate of 39% and increased disclosure requirements for
trusts for the 2021–22 and later income years. See Reporting requirements for domestic trusts.

The new disclosure rules have now been finalised and are contained in section
59BA of the Tax Administration Act 1994. As well as supporting Inland Revenue assessment of compliance with the new 39% personal income tax rate the new rules will assist the Commissioner with respect to understanding and monitoring the use of trusts in New Zealand.

The new reporting obligations do not apply to all trusts and the following are excluded from the enew reporting obligations:

 non-active trusts
 foreign trusts
 trusts incorporated under the Charitable Trusts Act 1957
 charitable trusts registered under the Charities Act 2005
 trusts eligible to be Māori authorities
 trusts that are widely-held superannuation funds
 trusts that are employee share schemes
 trusts that are debt funding special purpose vehicles
 lines trusts established under the Energy Companies Act 1992

Simplified reporting trusts have less reporting obligations. A trust qualifies for simplified reporting requirements for a relevant income year if the trustee
reports:
 less than $100,000 assessable income
 less than $100,000 deductible expenditure, and
 total assets in the statement of financial position (including both private and
income producing assets) valued at less than $5 million as at balance date.

For trusts that do not qualify for simplified reporting the financial statements must:

For more information see:

• the Special report on the Tax Administration (Financial Statements – Domestic Trusts) Order 2022
• the Inland Revenue webinar on the trust disclosure requirements