Additional Reporting Requirements for Income Earning Family Trusts

Additional reporting requirements for income earning family/domestic trusts were introduced on the 1 April 2022 under the Taxation (Income Tax Rate and Other Amendments) Act 2020. It is important that you are familiar with your obligations if you are a trustee of an income earning family trust or are considering settling some or all of your assets into a family trust. 

Most income earning family trusts which do not fall within specified exclusions are required to provide additional information in their annual return at the end of each financial year. The additional reporting requirements include: 

• Confirmation of the trusts financial position (profit and loss statements, details of assets, liabilities, and equity. 
• Details of who has settled assets into the trust (the Settlor) including the nature and amount of the assets settled. 
• Beneficiary details and the amount and nature of any distributions made to them.
• Details of any amounts withdrawn from the trust by beneficiaries and a reconciliation of the opening and closing balances of any beneficiary accounts. 
• Details of the power of appointment contained in the trust including the full name/s of the persons who hold the power of appointment, their date of birth, country of tax residency, their IRD number and the date that they were given the power of appointment or ceased to hold such power of appointment. 

These reporting requirements do not apply to non-active trusts (e.g. a trust that only holds the family home).

If you are not sure about whether the reporting requirements apply to your family trust or have other questions or concerns regarding your family trust contact our specialist team at DTI Lawyers.