How the trust's income is taxed
The tax on a trust's trustee income is calculated at a flat rate of 33 cents in the dollar for all three different types of trust. Beneficiaries who are New Zealand residents are liable for New Zealand income tax on all their income, from any source in the world. Beneficiary income they receive from any trust will be taxable in New Zealand, at their normal income tax rates.
New Zealand residents are taxed on their worldwide beneficiary income. Non-residents must pay tax on New Zealand sourced beneficiary income. Provisional tax is payable if the residual income tax is $2,500.00 or more.
Explains the general rule on when the trustee is liable for New Zealand income tax, exceptions to this general rule, settlor liablility, and provisional tax obligations.
Special rules apply for children under 16 who receive beneficiary income.
Date published: 23 Nov 2004
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