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Income that is not beneficiary income is trustee income. However, in addition to “ordinary” income, certain gifts and settlements onto trust must also be accounted for as trustee income.
The rules that determine whether a sum is income or not are the same for a trustee as for any other taxpayer.
The legal definition of trustee income also includes amounts that would not otherwise be accounted for as trustee income
Unless an exception applies, trustee income also includes income paid to a minor (child) beneficary.
The market value of property settled onto a trust must be accounted for as trustee income if:
Income derived by the trustee of a testamentary (will) trust must be accounted for as trustee income if the income would otherwse have been income to the deceased person.
Income derived by a non-resident trustee of a trust with a resident settlor must be acconted for as trustee income.
A non-resident trustee must also account for income if the settlor dies resident in New Zealand and the trustee is resident at any time.
Income that arises under the financial arrangement rules following a distribution to a beneficiary for whom there is no natural love and affection is taxable as trustee income.
Bright line property rule
How moving property out of a trust may trigger the bright-line property rules. See .https://adls.org.nz/Attachment?Action=Download&Attachment_id=4120&mc_cid=ba7e48fe73&mc_eid=809c113bec
References:
Income Tax Act 2007, s CC 3(2), HC 4, HC 7, HC 25
Matters of Trust 
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