Chapter 9 - Registration and reporting requirements


Current regulation of trusts in New Zealand

At present there is very little regulation of trusts in New Zealand. While incorporated charitable trusts are required to be registered and charities can register in order to obtain tax benefits, there is no register for inter vivos or testamentary trusts. In respect of incorporated charitable trusts, the registration is the process that establishes such a trust as a corporate body. As trusts do not have legal personality, there is not the same necessity for a registration system.

There are also no reporting requirements for these trusts other than the requirement for income earning trusts to submit a tax return to the Inland Revenue. Up until 1 October 2011, the gift duty requirements meant that a settlor of a trust that still owed a debt for the settlement of trust property was required to submit an annual gifting return to show that the gift of the portion of the remaining debt did not exceed the threshold above which gift duty had to be paid. This created a de facto reporting requirement for a number of trusts. Gift duty has now been abolished. New legislation, discussed in paragraphs [10.24]−[10.31], provides some requirements for trust service providers to obtain, verify and retain records of the beneficial ownership and control of trusts.