Income Taxation the New Zealand Minor Beneficiary Regime

Abstract

This working paper comprises a chapter of a book on the taxation of trusts that is scheduled to be published by Brooker’s, Wellington, New Zealand, in 2002, together with fragments from two other chapters. The draft chapter, section 3 of this paper, was written as a result of the passage of the Taxation (Beneficiary Income of Minors, Services-Related Payments and Remedial Matters) Act 2001, in particular the parts of that Act that relate to beneficiary income of minors. Section 2 of the paper discusses the meaning of “settlor” in the Income Tax Act. The terms “settlor” and “settlement” are of pivotal importance in the architecture of the minor beneficiary regime. Section 4 backgrounds the relationship between the trust regime in the Income Tax Act and the company tax imputation system and explains how the Act integrates imputation credits and the minor beneficiary regime. Because the paper is to become a chapter from a proposed book on the taxation of trusts in general it omits certain cross-references that will in due course appear in the book. Thus, for example, the paper does not attempt to explain some of its more abstruse references rules that apply to trusts with international connections.