Under the New Zealand’s income tax law, when a non-resident settlor establishes a trust with a New Zealand resident trustee which does not derive New Zealand sourced income, that trust, its trustees, and the non-resident beneficiaries are not liable for New Zealand taxation.
If the beneficiary receiving the taxable distribution from a foreign trust is not a New Zealand resident, they will only have to pay New Zealand income tax on any part of the taxable distribution that came from a source in New Zealand.
If effective management of the foreign trust is a New Zealand resident then the trust may claim the benefit of New Zealand's taxation treaty network.
If the funds are invested outside of New Zealand no tax is payable on that income in New Zealand.
There is no capital gains tax in New Zealand. Any capital increase in the value of the trusts’ assets is therefore not taxable.
A New Zealand offshore trust is an excellent offshore investment vehicle and can own any transferable asset and invest in the same way that any other International Business Corporation (IBC) can. A New Zealand trust can also purchase property in New Zealand.
The costs for a New Zealand offshore trust are normally significantly lower than virtually any other tax haven jurisdiction.
A qualifying resident foreign trustee is an individual, who is a member of an approved organisation, or an entity that has a director or other individual who is resident in New Zealand and is a member of an approved organisation who is in a position allowing significant influence over the management or administration of the trustee. Organisations that have been granted approved organisation status are the New Zealand Institute of Chartered Accountants, the New Zealand Law Society, and the Society of Trust and Estate Practitioners (New Zealand Branch).
No audit of the accounts of the Offshore Trust is required.
No Government registration of the Offshore Trust is required.
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