Taxation of Trusts: Income, Distributions, Compliance

Part 1: Beneficiary Income and Complying Trust Status

Many clients utilise trusts to hold income-earning assets and investments. The Income Tax Act 2007 includes specific rules on how trusts are classified, and on how trust income and distributions are taxed.

The focus of this webinar will be on taxation issues associated with beneficiary income and ensuring your client’s trust maintains complying trust status.

Issues examined will include:

• When can deemed income under tax law, e.g. FIF income, be distributed to beneficiaries?
• How do the timing rules around beneficiary income work?
• How are tax credits allocated to beneficiaries?
• What sorts of trustee income prevent a trust being a complying trust?
• Who is a settlor for tax purposes?
• What happens when the trust settlors, trustees, or beneficiaries become non-resident?

Part 2: Distributions and Debt Forgiveness

Many clients utilise trusts to hold income-earning assets and investments. The Income Tax Act 2007 includes specific rules on how trusts are classified, and on how trust income and distributions are taxed.

The focus of this webinar will be on taxation issues associated with distributions from complying, foreign, and non-complying trusts.

Issues examined will include:

• How are resettlements and distributions of trust assets treated from an income tax and GST perspective?
• When trustee debts can be forgiven for natural love and affection, and when that forgiven debt may be clawed back as income.
• How are distributions from foreign trusts and foreign inheritances taxed?

Suitable for:

• Accountants and lawyers who act for trusts.
• Accountants and lawyers who are trustees of trusts and want to ensure the trust is meeting its tax obligations.