New IRD Disclosure Requirements for Trusts

From 1 April 2021 onwards certain information must be provided to the Inland Revenue Department for certain trusts.

The information that trustees must provide to the IRD is:

  1. Financial statements;
  2. All “settlements” that occurred during that tax year;
  3. The name and tax information of each person who made a settlement on the Trust;
  4. Every distribution that was made from the Trust in that year and to who;
  5. Each person who during that tax year had the power to appoint and remove any Trustee and any other information that Inland Revenue requires.

 

Fortunately, not all trusts are captured under the new rule. If you have a Trust which just has a family home in it and it is “non-active” you do not need to file the above information.

It is not clear what form the disclosure will take and it is also not really clear whether or not the disclosure should be done by your accountant or your lawyer. It will most likely be your accountant.  Hopefully, some more detail will come out about that soon.

There is a fair amount of resistance to new disclosure requirements.  It is fairly widely considered that the information now demanded of trustees goes beyond what is necessary for the IRD. 

On top of the new requirements in the Trusts Act, these new rules present additional challenges for Trustees.

People with active trusts may wish to consider whether or not it is worth keeping their trust going.

Certainly, there are benefits to a trust and that decision should not be taken lightly. Make sure you speak to your lawyer or your accountant about your trust.

If you haven’t already done so a full review of your Trust is now appropriate.

 

Contact us:

INVERCARGILL

Phone: 03 211 1370
Address: 151 Spey Street

 

QUEENSTOWN

Phone: 03 441 0616
Address: Level 2, The Forge Athol Street

 

ALEXANDRA

Phone: 03 440 0026
Address: Level 1 77 Centennial Avenue

 

CROMWELL

Phone: 03 445 4111
Address: Unit 8 CromTrade 2 McNulty Road

 

WINTON

Phone:   03 236 7000
Address: 270 Great North Road

 

TE ANAU

Phone: 0800 100 151
Address: 112 Town Centre

 

GORE

Phone: 0800 100 151
Address: 11 Bowler Avenue

 

Disclosure