For a New Zealand foreign trust (NZFT) to remain eligible for its tax exemption on foreign-sourced income, the contact trustee or tax agent must:
- complete the NZFT's return each tax year
- attach the NZFT's financial statements
- pay the fee for annual returns, if required.
If you want to pay the fee for annual returns using direct debit and do not have an agreement with us, make sure you set this up before filing.
Set up a direct debit agreement with us
Before you start
For the tax year, you'll need details about the NZFT's:
- New Zealand resident trustees
- settlements and distributions, if any
- new settlors or beneficiaries receiving distributions, if any
- future - will this be the NZFT's final return?
You'll also need to send us financial statements that comply with the minimum standards.
File an NZFT's annual return in myIR
From the homepage in your myIR account, select:
- 'Returns and transactions' on your New Zealand foreign trust account
- the 'Periods' tab
- 'File return' on the tax year you're filing for.
Enter the NZFT's return details
You'll need to tell us whether all of the trustees are:
- natural persons
- not a professional trustee.
This is your chance to update us if the trustees change.
You'll also need to tell us if, during the tax year, the trust:
- received any settlements
- made any distributions.
Update the NZFT's connected persons
To change any details for connected persons, click on the tab with their name and role. You can also click on their role in the list to bring up each person's details.
If the trust has new connected persons, you'll need to click on 'Add new connected person'.
For each person connected to the NZFT, you'll need to provide their:
- role - that is, connection to the trust
- taxpayer identification number in their jurisdiction of tax residence, or IRD number if they are a New Zealand tax resident
- address and contact details.
You'll need to make a declaration that the NZFT's connected persons have agreed to provide us with certain information.
You'll be able to make additional notes, as well.
Roles for connected persons of New Zealand foreign trusts
Enter all settlements and distributions for the tax year
Click on 'Add new settlement or distribution' for each entry. You'll need to tell us the:
- type of transaction - settlement or distribution
- full name of the person making or receiving it - for them to appear as an option, you'll need to be sure they've been disclosed as a settlor or beneficiary
- type of settlement or distribution - cash, services, land, shares, financial arrangements or other
- date paid or credited
- amount in the selected currency.
You'll be able to list additional details, too.
You'll need to upload the NZFT's financial statements for the tax year. They must comply with the minimum standards for financial statements.
Minimum standards for financial statements
Pay the fee, if required
The fee for annual returns is $50, GST included. If you are required to pay it, this step will come up as part of the process.
If you have a direct debit agreement with us and you want to use it to pay the fee, select:
- 'Yes' to 'Do you want to make a direct debit payment?'
If you want to pay another way, click 'No' to this question. Finish the rest of your annual return and the fee will show up as an amount owing on your 'NZ foreign trust' account. Click on the account and select 'Make a payment' under either the:
- 'More' section on the New Zealand foreign trust account
- 'I want to...' section.
If the trust has stopped being an NZFT during the tax year, click:
- 'Yes' to 'This is the final return for this account.'
If the NZFT will keep on operating, click 'No'.
If your trust has stopped being an NZFT during the tax year, you'll also need to cancel the trust's registration.
Cancel a New Zealand foreign trust's registration
Review and submit your annual return
Make sure all of your details are right. You can make changes by clicking on the tab you want to edit.
If the information you've given is correct, check the declaration box and submit the NZFT's return.
Log into myIR
If you want to register an NZFT using paper forms, you can do this. You'll have the option to send us the completed and signed forms, with the required attachments, by either:
File an annual return for a New Zealand foreign trust using paper forms
What happens next
You'll get a confirmation number and be able to see your return under the 'Submitted' tab of your 'NZ foreign trust' account.
We'll process your request within 10 working days. If we need more information, we'll contact you.
If you were required to pay the fee for annual returns and have not yet paid it, make sure you pay it as soon as possible.
You'll need to make sure that the financial statements you submit comply with the minimum standards.
Minimum standards for financial statements
Non-compliance with the disclosure rules can result in the trustee losing their access to the foreign sourced income exemption for the relevant income year and/or being charged the Foreign Exemption civil penalty (of up to $1,000) for failure to comply.