If you've filed Trust returns with any of these errors, please amend the returns through your software or in myIR.
Details of the person or entity
Details of the person for settlors, beneficiaries and powers of appointment must include all of the following:
- a name
- date of birth (or entity commencement date if it is a non-individual)
- jurisdiction of tax residency
- a New Zealand (NZ) IRD number or Tax Identification Number (TIN) if they are a non-resident of NZ.
You do not have to provide all 4 pieces of information of the settlor, beneficiaries, and powers of appointment in these situations:
- If the information is about a settlor who did not make a settlement in the current year and the trustee has made reasonable attempts to get the information, but been unable to get the information. In this case, at a bare minimum, supply the settlor’s name and tick the box ‘no settlement has been made by this settlor in this income year’. No settlement value should be supplied for historic settlements.
- If the person’s jurisdiction of tax residency is NZ and they do not have an IRD number (they are a minor or a non-active company for example), leave the IRD number field blank and tick the box ’TIN not required in jurisdiction’.
- If the person’s jurisdiction of tax residency is not NZ and they do not have a TIN (either because they are not required to have one or because the jurisdiction does not issue TINs) either tick ‘TIN not required in jurisdiction’ or ‘Jurisdiction does not issue TINs’.
Common errors we’re seeing for details of persons
IRD numbers are not matching the name or date of birth recorded.
We’re seeing returns filed using:
- the trust’s own IRD number
- the same IRD number against multiple beneficiary names
- Generic IRD numbers. For example 111-111-111
If the person does not have an IRD number for a valid reason, then tick ‘TIN not required in jurisdiction’ and leave the IRD number field blank. If the person does have an IRD number then the trustee has an obligation to disclose it.
Errors in TIN field
The following errors are the most common ones we’re seeing in the TIN field.
- NZ IRD number entered in the TIN field for non-resident person. If the person has provided a NZ IRD number, please still put this in the IRD number field
- Unusual or incorrect information entered in the TIN field such as ‘N/A, 0, -, 000, xxx and ‘beneficiary has not provided’. If the customer has a TIN, you need to get it from them. If they do not have a TIN then tick one of the boxes on the form to indicate that and leave the TIN field blank.
‘Jurisdiction does not issue TINs’ should be used only if the overseas country does not issue any kind of tax identifier at all. It should never be used for a NZ resident.
Errors in date of birth field
The date of birth or commencement date must be in the past. Do not enter future dates.
Settlors and settlements
We expect that all trusts required to make trust disclosures will provide settlor information for the 2022 year. In following years, you’ll only need to provide settlor information if a settlement occurred during that financial year.
Common errors we’re seeing for settlors and settlements
- Many returns have been filed without any settlor information. A trust cannot exist without a settlement so at a minimum the name of the original settlor must be provided.
- Settlor disclosure forms with ‘no settlement has been made by this settlor in this income year’ ticked but still have monetary figures in the settlement amounts. Only tick this box if the person has not made a settlement in this income year. In other words you’re providing information about a historical settlor.
- You are not required to disclose the amount and nature of historical settlements.
- No settlement value should be supplied for historic settlements.
The changes for financials include 4 categories and a total for assets,1 category and a total for liabilities, and the current account year-end balance and owners’ equity.
Common errors we’re seeing for financials
‘Total assets’ is left blank or appears to be the sum of the 4 listed asset categories. ‘Total assets’ should be all assets owned by the trust. It’s unlikely a trust would not have other assets (such as a bank account) so it’s unusual for the sum of the 4 listed categories to equal the total assets of the trust. Equally, a trust would not exist without any assets, so a nil balance is also likely to be wrong.
‘Owners’ equity’ is the total of the trust corpus plus any capital gains or retained trustee income. It does not include the beneficiary current account balances.
Total assets plus Total Liabilities should equal Owners Equity plus Current Account year-end balances.