Trusts have been a relatively straight forward entity type to manage when it comes to holding assets. The Trusts Act 2019 came into effect on the 30th of January 2021 and this act has changed the requirements around trusts.
The Government recently introduced increased disclosure requirements for all trusts in this bill to identify whether trust usage changes as a result of the increase to the personal income tax rate which comes into effect in April. These changes appear to be made to capture increased usage due to the increase in the top personal income tax rate.
With effect from the 2022 income year, all trusts will be required to provide much more information to the IRD regarding the trust when they file their income tax return. This information will cover:
- Details of settlors, including all settlors in the past. Including names, IRD numbers and other appropriate information.
- Details on all persons with the power to appoint the trustees.
- Details of any changes in beneficiaries.
- Financial Statements will be required where the trust has assessable income.
- Distributions and Settlements made in the income year.
These requirements mean providing the IRD with historical information. To ensure we have all the information required, we will start working with all trust clients to review what information is now required to make sure we have everything in place before these rules come into effect.
The above changes show why it is critical to have your trust records in order, to ensure you are meeting the requirements of both the Trusts Act 2019 and this latest legislation.
If you need help with your trust, Talk to your local SBA, we can help make sure all of your trust records are in order.