Since the Government announced their proposal to lift the Trust income tax rate to 39%, we are aware many in the tax industry are asking what that may mean for their clients.
The proposals are not legislation until enacted and are subject to change through the parliamentary process. Once any new legislation is enacted we will issue guidance on its application if needed.
We are also aware that one of the examples used in the Bill commentary and factsheet has caused some confusion. The example noted that trustees could distribute income to a beneficiary, who may then decide to resettle it on the trust. We agree that there is some uncertainty under existing law about the tax treatment of such a settlement and we will be undertaking consultation on this. To avoid creating that doubt we have changed the example in those documents.
Tax Bill containing Budget measures introduced (ird.govt.nz)