Update on termination of foreign trusts by 30 June 2017

Inland Revenue has issued advice in relation to the obligations of New Zealand resident trustees of foreign trusts who cease to be trustees on or before 30 June 2017.

Inland Revenue advises as follows:

Trusts that will cease to be a New Zealand Foreign Trust on or before 30 June 2017

“As a result of a review of the relevant new legislation, the Department accepts that trusts which do not have a resident foreign trustee at midnight on 30 June 2017 are not required to register under section 59B or consequently to furnish any income tax return for the trust in respect of past periods (other than any which might be required in respect of New Zealand source income).

However, trusts which formerly had a New Zealand resident foreign trustee should provide written confirmation of the removal of those New Zealand trustees to the Department on or before 30 June 2017 together with information in each case concerning the name and address of the replacement trustee.

To assist in the administration of this process, please provide us with a notification letter for each New Zealand foreign trust which is terminated on or before 30 June 2017, or in respect of which the New Zealand resident trustee has been removed (or will be removed) and replaced with an overseas trustee.

This notification letter should be completed by the New Zealand resident trustee (or former New Zealand resident trustee) and can be addressed to us at nzforeigntrusts@ird.govt.nz.

Where the trust is terminated on or before 30 June 2017, please provide the following information:

  • Name of the New Zealand foreign trust.
  • Full name of New Zealand resident trustee.
  • Date of termination.

Where the New Zealand trustee has been (or will be) removed and replaced by an overseas trustee on or before 30 June 2017, please provide the following information:

  • Name of the New Zealand foreign trust.
  • Full name of New Zealand resident trustee.
  • Date when New Zealand resident trustee removed.
  • Confirmation that after date of removal there is no New Zealand resident trustee and that the new trustee is not a New Zealand resident.
  • Details of the new trustee, including their name, email address and physical address.”

De-registration for trusts that are registering after 21 February 2017

Inland Revenue also advises that it will provide further guidance in the near future on its website for de-registration. Please note this will only apply to trusts that have registered with Inland Revenue under this new regime.

If you have any queries or concerns about any of the above, please contact International Revenue Strategy, Inland Revenue at nzforeigntrusts@ird.govt.nz.

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