[OPINION] Four Steps to Preserve your Family’s Wealth and Legacy
The past half-decade has seen more shifting in the landscape for New Zealand trusts than in the several decades before: the Trusts Act 2019 was introduced and took effect in early 2021 after years of consultation and review, reporting and disclosure requirements for Trusts have increased considerably through the IRD; and now the trustee tax rate is to be raised from 33% to 39% on 1 April (excluding charitable trusts) – effectively an 18.2% rate increase. The rationale is to align this rate with the top personal tax rate of 39% for income above $180,000.
By Patrick Gamble, Chief Executive Officer, Perpetual Guardian Group
However, unlike the progressive income tax system for individuals, trusts will continue to be subject to a flat tax rate. From the first dollar to the last, all trust income will be taxed at 39%, even where the beneficiaries are low- or middle-income and would otherwise be paying much lower tax rates.
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