Tax changes affecting trusts
The Tax (Income Tax Rate and Other Amendments) Act 2020 was enacted on 7 December 2020. The Act introduces, among other things, a new marginal tax rate of 39% for personal income of $180,001 and above. It also introduces new information gathering powers to support the IRD’s ability to assess compliance with the new marginal tax rate.
This will mean tax returns filed by trustees will need to be accompanied by additional information on the income and financial position of the trusts, as well as on distributions from, and settlements made on, those trusts. All of these will take effect from the 2021-2022 tax years.
TGT Legal have put together a video explaining the information that trusts are required to provide with their annual returns, together with the practical issues that arise from the new regime. Trustees and their advisers should be considering these issues well in advance of filing their next tax return.
Click here for a link to the video.