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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
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
The recent case of Three Chicks v NZ Building Projects raises the novel question – can a remedial constructive trust be claimed in respect of work carried out under a contract? By way of background Three Chicks, the owner of a property, assigned a building contract to NZ Building Projects. Following the completion of the … Continue reading
Jurisdictional issues involving trusts are common in a tax context due to trusts being variously tax-resident in one jurisdiction or another depending on the residence of trustees and settlors. Due to the mobility of settlors and trustees trusts can be resident in more than one jurisdiction with, at times, significant tax consequences. However, until recently the jurisdictional … Continue reading
Another day, another decision. Beneficiaries of new appear to be more litigious beasts than beneficiaries of old. I blame the internet. Or google. Whatever the reason, trustees need to take more care to ensure that their decisions cannot be impugned. This point is highlighted in McNulty v McNulty & Ors a case involving two beneficiaries and … Continue reading
Matters of Trust 