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The fifth issues paper on the Review of the Law Trusts: “Court Jurisdiction, Trading Trusts and other issues: Review of the Law of Trusts” was issued today. The paper is available from the Law Commission. The paper will be progressively reviewed and commented on at the Review page of this blog.
A recent High Court decision found that the Family Court does not have the jurisdiction to consider an application under s 182 of the Family Proceedings Act if the order dissolving the parties’ marriage was not made in New Zealand. See Jurisdiction, Divorce and Trusts. s. 182 Section 182 of Family Proceedings Act 1980 enables the Court … Continue reading
When a trustee derives income for tax law purposes due to the application of deeming provisions it is not always clear whether that deemed income can be distributed as beneficiary income. An interpretation statement released today for discussion purposes considers the tax treatment where income is derived for income tax purposes but not trust law purposes. … Continue reading
The Sunday Star Times (27 November 2011, D4) questions whether trust professionals are “urging people with family trusts to continue gifting at $27,000 a year despite the abolition of gift duty … to bolster their own profits.” Jonathon Cron of New Zealand Trustee Services is quoted as saying that “compliance saving [as a result of … Continue reading
Trustees, even professional trustees, do not always appreciate what is required to retire as a trustee, or who needs to be notified. Often retirement is treated quite casually and a trustee may believe, quite incorrectly, that notifying the remaining trustees that he or she has retired is sufficient. This lack of formality or appreciation of what needs … Continue reading
A fundamental principle of trust law is that trustees act personally. However, there is a big difference between acting personally and acting in accordance with your personal beliefs. This dichotomy, and the resulting consequences are high-lighted in the recent United Kingdom case of White v Williams.
New Zealand isn’t the only jurisdiction carrying on a love affair with trusts. Although the numbers of trusts in Australia, once population adjusted, are less per head than in New Zealand, the numbers are significant with the Australian Tax Office reporting over 660,000 trust tax returns for the 2008-09 year. These trusts spanning a broad range of industries … Continue reading
The recent case of Rabson v Gallagher provides an excellent example of how not to use trusts in the context of protecting property from a relationship partner. The first mistake made was to intermingle relationship property and trust property. Where this happens any party should expect the court to ensure that the disaffected former partner is compensated. It is entirely possible and permissible … Continue reading
A recent discussion on the main sources of trustee liability highlighted again, the importance of appreciating the subtleties inherent in the role of trustee. The case under consideration revolved around three trustees, one of whom was a professional trustee, who decided to invest a substantial sum of trust money. Enquiries were made, advice taken from … Continue reading
On 31 August 2011, Inland Revenue issued Revenue Alert RA 11/02. This Revenue Alert sets out the Commissioner’s views in response to the decision in Penny and Hooper as to when diverting personal services income through an associated entity such as a trust will constitute tax avoidance. Key provisions The main points of the Revenue Alert can be … Continue reading
