The Taxation (Annual Rates, for 2022-23, Platform Economy and Remedial Matters) Bill (No 2) proposes several changes to section 43B of the Tax Administration Act 1994. The changes outline situations where a trust may make a declaration to be excused from filing an income tax return in a particular year or on an ongoing basis.
These changes increase the thresholds of income and expenses, and widen the eligible income type from just bank interest to any source of reportable income (i.e. income that has been taxed at source). The changes also introduce a new set of criteria that is applicable only to testamentary trusts. These changes have retrospective application for the 2021/22 income tax year.
We appreciate that this legislative change will not be enacted until very late in March 2023, which does not allow sufficient time for trustees to make a declaration before their income tax return is due. In response to this, Inland Revenue are proposing options to ensure a practical implementation.
Reduced disclosure requirements for small trusts