GRA Blogs

Articles by John Rowe

New Foreign Trust Rules

AUTHOR: John Rowe

POSTED: 17 June 2017

If you are not a tax resident of New Zealand and have a New Zealand trust with New Zealand resident trustees, you may be subject to the IRD’s new foreign trust registration and disclosure rules.

These rules are in place as a result of concerns around the use of foreign trusts following the 'Panama Papers' publicity. The IRD have moved to make sure that they obtain and pass on significant information in relation to foreign trusts.

To provide some brief background, a foreign trust is a trust where no person who has made a settlement on the trust has been a tax resident of New Zealand during the lifetime of the trust. This means your typical foreign trust is one that is set up and funded by individuals who are not tax resident at the time the trust was set up and have not become tax resident since. One of the main benefits of a foreign trust is that foreign income is not subject to tax in New Zealand.

Under the new rules, all foreign trusts in existence currently have to be registered by 30 June 2017. Registration involves provision of a copy of the trust deed, extensive details of settlors, trustees and holders of the power to appoint and remove beneficiaries, details of any settlements made on the trust and details of beneficiaries, as well as payment of a $270 fee to the IRD. There is also an annual filing obligation which will see financial statements needing to be filed, along with details of any settlements and distributions, and payment of a $50 fee.

Following this, if you have a trust and set it up at time when you were not tax resident of New Zealand and no person who has provided any value or gifted to the trust has become a tax resident since, then you may have a foreign trust and you should contact us immediately to determine if the new registration and annual filing rules apply to you.

Please contact us at GRA for assistance if you think these new rules might apply to you - phone us on +64 9 522 7955 or email us at info@gra.co.nz.

Request a Meeting

John Rowe
Director
Business Accounting Services

09 522-7955

jr@gra.co.nz

© Gilligan Rowe & Associates LP

Did you like this article? Subscribe to our newsletter to receive tips, updates and useful information to help you protect your assets and grow your net worth. We're expert accountants providing expert advice to clients in NZ and around the world.

Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.

Comments

Testimonials

Hi John, I just wanted to say a huge thank you for sitting down with me the other day to do the review. I learnt so much from this time with you and its really giving me some good things to consider with moving forward - Sam, October 2018

Would you like to receive . .

. . tips, updates and useful information to help
protect your assets and grow your net worth?

Investing in residential property?

Put this at the top of your reading list.

If you're investing in residential property, seeking to maximise your ability to succeed and minimise risk, then this is a 'must read'.

Matthew Gilligan provides a fresh look at residential property investment from an experienced investor’s viewpoint. Written in easy to understand language and including many case studies, Matthew explains the ins and outs of successful property investment.