New Zealand to enact tighter foreign trust disclosure rules
Thursday, 16 February, 2017
The Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill, which introduces trust reform measures, was passed by the New Zealand parliament on 14 February 2017 and now awaits royal assent.
The reform measures were introduced to New Zealand's parliament in August 2016 and are based on the recommendations of the Shewan Inquiry. The inquiry was set up as a result of the Mossack Fonseca data leak in April 2016, which raised concerns about disclosure rules relating to foreign trusts registered in New Zealand. According to the inquiry’s terms of reference, the government decided to initiate the review 'to ensure New Zealand's reputation is maintained'.
The bill introduces new disclosure requirements for foreign trusts, which will require them to be registered with the tax authorities, costing NZD270, and charged an annual fee of NZD50. The trustees will have to supply the following information (according to s59B):
- name of the trust;
- details of each trust settlement;
- full details of every settlor or controller of the trust;
- full details of all adult beneficiaries, and parents or guardians of minor beneficiaries, of fixed trusts;
- details of each beneficiary or class of beneficiary of a discretionary trust;
- a copy of the trust deed and all amendments or additions to it.
Trustees will have to register the foreign trust by 30 June 2017, and thereafter notify any changes within 30 days of becoming aware of them.
According to s81, the information held on foreign trusts will be available to 'a person who is a member of the New Zealand Police or an officer, employee, or agent of the Department of Internal Affairs'.
The bill also enables the country's participation in the G20/OECD Common Reporting Standard for automatic international exchange of financial account information.