New Zealand: Amendments to 39% trust tax rate proposal

33% tax rate would continue to apply if total net trustee income is NZ$10,000 or less

33% tax rate would continue to apply if total net trustee income is NZ$10,000 or less

The Finance and Expenditure Committee released its report on the Taxation (Annual Rates for 2023-2024, Multinational Tax, and Remedial Matters) Bill introduced by the prior government in May 2023, which includes the proposed 39% trust tax rate. Read TaxNewsFlash

The new government indicated that it would proceed with the 39% trust tax rate change effective from the beginning of the 2024-2025 income year, as originally proposed. Read TaxNewsFlash

In response to concerns about the potential for over-taxation of trustee income when the beneficiaries are not 39% taxpayers, the committee proposed a de minimis rule, pursuant to which the 33% tax rate would continue to apply if total net trustee income (i.e., after expenses and beneficiary income distributions) is NZ$10,000 or less. This is expected to benefit around 27,000 trusts. The committee also recommended expanding the exceptions from the 39% tax rate change (e.g., to include energy consumer trusts) and widening the scope of the disabled beneficiary trust and deceased estate “concessions.”

Read a March 2024 report prepared by the KPMG member firm in New Zealand 



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