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Legislation
Specific legislation can be searched via the internet (www.legislation.co.nz)
but in general New Zealand legislation is based on UK Law. However,
the Companies Act 1993 (as amended) was rewritten to more closely
follow the North American model. The Trustee Act (1956) together
with the Trustee Amendment Act (1988) encompasses the legislation
specific to New Zealand Trusts.
NEW ZEALAND TAX
New Zealand tax laws allow for a non-resident Settlor to establish
a trust in New Zealand without exposing that trust, its beneficiaries
or trustees to New Zealand tax, providing no income is generated
in New Zealand. Specifically in order for the Trust not to be taxed,
it must fall within section HH4 (B) of the Income Tax Act (1994).
This requires that the Settlor(s) of the trust has not been resident
in New Zealand during the income year. As the tax status is dependant
on the tax residence of the Settlor, a New Zealand resident Corporate
Trustee may act as trustee without jeopardising the tax status of
the trust. It should be noted that a company resident in New Zealand
is always resident in New Zealand, unless migrated to another jurisdiction.
While the trustee will not be liable for tax on income derived offshore,
all income sourced from New Zealand will be liable for New Zealand
tax.
IN SUMMARY
A New Zealand registered Corporate Trustee acting on behalf of a
New Zealand Foreign Trust would not pay taxes when: The Trustee
derives income from a non New Zealand source and the settler of
the Trust is not resident in New Zealand.
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