Tax issues for your Trust if you move overseas

October 16, 2013

in Trusts

Estates & WillsIt is becoming increasingly common for New Zealanders to leave the country indefinitely.  Many of those people have established Trusts while here in New Zealand and choose to leave in place their family Trust owning various assets, including property.

For the majority of Trusts tax treatment of income and distributions is fairly clear where all relevant parties (i.e. Settlors, Trustees and Beneficiaries) are based in New Zealand.

However, the taxation treatment of Trusts becomes more complicated when both parties or any one of them move from New Zealand.

Where the Trustee is based overseas the question of whether the Trust will be liable for tax on income in New Zealand depends on a number of different factors.  It is also possible that New Zealand tax may be payable on income which is sourced in the foreign jurisdiction which comes into the hands of the Trustees and the Beneficiaries.

In general the following basic principles can be noted:

  • If the Settlor is overseas and all the Trustees are based in New Zealand the income will generally be exempt from New Zealand tax.
  • If the Trustees and the Settlor are overseas then generally the income is not taxed here.

It is also important to understand that if Beneficiaries are based overseas consideration needs to be given as to what distributions are taxable and to what extent.

If you have settled a Trust in New Zealand and either the Settlors, Trustees or Beneficiaries are now based off-shore we strongly recommend you take advice on the implications for the continuing administration of the Trust.  We have extensive experience in Trust management and administration and can assist you in this regard.

If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:

Paul Farry

09 379 0055 or 03 477 8870


The information contained in this publication is intended as a guide only.  It does not constitute legal advice and should not be relied upon as such.  Professional advice should be sought before applying any of the information to particular circumstances.  While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain. 


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