The Benefits Of New Zealand Foreign Trusts
What Is A Trust?
In common law legal systems, a trust is a private legal arrangement or relationship whereby property (real, tangible and intangible) is managed by a trustee (corporate or individual) for the benefit of another or for specified purposes. For further details read our previous blog post on trusts.
Benefits of New Zealand Foreign Trusts
The benefits of a New Zealand Foreign Trust would include the following;
- Asset protection;
- No Capital gains;
- Confidentiality;
- Succession planning.
- Flexibility;
- Onshore, non black-listed jurisdiction;
- Limited reporting requirements;
A New Zealand Trust which is settled by a non resident is not subject to New Zealand tax except on income derived in New Zealand. This is the case even if the trustee is a tax resident of New Zealand.
There are no inheritance, wealth or capital gains taxes levied in New Zealand. There is no gift duty, stamp duty, VAT or equivalent forms of indirect taxation charged on the creation, or transfer of assets to a trust, by a non resident of New Zealand.
Trustee Requirements
A New Zealand Foreign Trust is required to have a New Zealand Resident Trustee. In addition, the Trust deed can provide for the trustee to appoint advisors where it is deemed necessary. However, the Trustees and the Protector will retain the responsibility of acting in the best interests of the beneficiaries.
Disclosure Upon Settlement
A trustee of a foreign trust must provide to the Inland Revenue Department with;
- The name of the New Zealand Foreign Trust and date of settlement,
- The name and address of the Trustee, and
- Whether a Settlor is resident in the Commonwealth of Australia.
However, this information is not available to the public and there is no public registry of trusts.
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