This On Demand was originally broadcast on 11 September 2024.

Mastering Trust Taxation: Key Insights and Strategies

Trust structures are commonly used for both private and commercial purposes and will often be encountered by lawyers regardless of their practice area. However, the New Zealand taxation regime for trusts can be difficult to navigate due a constantly expanding number of rules and exceptions that do not always cohesively fit together. 

The objective of this On Demand is to provide a broad overview of the taxation of trusts in a digestible format for the audience. The presentation will draw on interesting real-life examples to demonstrate how the relevant tax rules are applied in practice and will discuss common issues and pitfalls to avoid.

Purchase the first two sessions and receive Session 3 free! Contact the CPD team for details.

Who should watch?

This On Demand is aimed at lawyers who advise on trust matters and want to enhance their understanding of the tax rules that apply to trusts, including the ability to identify tax issues and potential implications for clients. It may also be of benefit for tax lawyers, although no prior tax knowledge or experience will be assumed.

Learning Outcomes

• Understand New Zealand’s settlor-based taxation regime and identify the features of a trust that determine how it is treated for tax purposes. 
• Learn the circumstances under which a non-resident trustee is subject to tax on its worldwide income and when a resident trustee is exempt from tax on its foreign-sourced income.
• Be aware of the basic building blocks of the trust rules, including those relating to settlors, trustees, beneficiaries and residence. 
• Become familiar with the concept of beneficiary income, how it may arise, how beneficiaries are subject to tax and when beneficiary income may be treated as trustee income in order to prevent under-taxation.
• Become familiar with the concept of trustee income, how it is calculated, when it will be subject to tax at either 39% or 33%, and the implications of the recent law change increasing the trustee rate to 39%.
• Be able to distinguish between the three types of trusts and be aware of the different tax treatment that applies to distributions from each type of trust. 
• Learn about the tax implications of settlors becoming or ceasing to be a New Zealand resident and the ability to make an election for a trust to be (or to remain) a complying trust. 
• Understand the general compliance and reporting framework for trusts.
• Gain an appreciation of specific tax issues relating to trusts.

Presenter

Conor Tinker, Senior Associate, Chapman Tripp