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With limited exceptions the trustee tax rate has increased to 39% effective 1 April 2024. Note that for deceased estates: For disabled beneficiary trusts: For more information see Trust and estate changes. References: Tax Bill receives assent (ird.govt.nz)
Inland Revenue has issued a General Article (GA 24/01) providing guidance regarding how Inland Revenue might perceive certain transactions and structure changes. In GA 24/01 Inland Revenue provides high level guidance regarding specific transactions and structural changes that are unlikely to be considered tax avoidance (without artificial or contrived features) such as distributions of income … Continue reading
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 … Continue reading
QB 15/11: Income tax – Scenarios on tax avoidance – 2015 gives examples where trustees of a discretionary trust take into account the tax position of the beneficiaries when making decisions about distributions of beneficiary income; and finds that this is not tax avoidance. However, there are some important caveats, and the question to consider when any … Continue reading
Inland Revenue has issued a QWBA (QB 15/11) regarding whether a trustee exercising a discretion to distribute trustee income (that would be taxed at the trustee rate of 33% if retained by the trustee) to a beneficiary on a lower tax rate, a beneficiary with tax losses or a beneficiary to whom the income will … Continue reading
Inland Revenue has released Interpretation Statement 12/02: Income tax – Whether income deemed to arise under tax law, but not trust law, can give rise to beneficiary income. Interpretation Statement 12/02 (IS12/02) confirms the Commissioner’s view (outlined last year in IS1110: see Tax law review of whether deemed income is beneficiary income) that in some circumstances, … Continue reading
Historically, absent a specific anti-avoidance provision, trustees have been unclear as to whether resident withholding tax (RWT) credits must be allocated in proportion to interest income or if the credits could be “streamed” for better effect. A recent amendment to the Income Tax Act 2007 has clarified the position and now provides that a trustee can … 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
Matters of Trust 