Trusts and information disclosure

The Trusts Act 2019 introduced new presumptions that trustees will make basic trust information available to every beneficiary and provide further trust information to beneficiaries on request. And the introduction of the 39% tax rate brought increased requirements for active trusts to disclose information to Inland Revenue.

The Trusts Act recognises that it may not always be advisable to make basic information available to all beneficiaries. The Act sets out the factors trustees must consider when deciding whether to provide basic trust information and how to respond to requests from one or more beneficiaries for trust information.

From the 2021-22 income year onwards, trustees of complying trusts are required to provide more information to Inland Revenue (IR) on their annual returns. ‘Complying trusts’ are those that have a New Zealand resident settlor and New Zealand resident trustees. The requirement to provide additional information applies to trustees of all trusts that have assessable income and that are required to file a return. IR can also request the additional information for periods up to 8 years prior to the 2021-2022 income year.

Trustees of trusts that have minimal income may make a non-active declaration (IR633) so that they are not required to comply with the new Inland Revenue reporting obligations.

Let us know if changes occur that affect your family trust and catch up with us about your obligations as trustees to disclose information, whether to beneficiaries or to Inland Revenue.

Download the guide on Trusts and Information Disclosure