Income Tax Act 2007

HC 26 Foreign-sourced amounts: resident trustees
Exempt income

(1)

A foreign-sourced amount that a New Zealand resident trustee derives in an income year, and is included in trustee income for the income year, is exempt income under section CW 54 (Foreign-sourced amounts derived by trustees) if—

(a)

no settlor of the trust is at any time in the income year a New Zealand resident who is not a transitional resident or, if no settlor exists in the income year, the last surviving settlor was a non-resident when that settlor ceased to exist; and

(ab)

no election under section HC 33 has been made for the trust; and

(b)

the trust is not—

(i)

a superannuation fund; or

(ii)

a testamentary trust or an inter vivos trust of which a settlor died resident in New Zealand (whether or not they died in the income year); and

(c)

for a foreign trust for which a resident trustee applies for registration within the period (the application period) given by section 59C of the Tax Administration Act 1994 and that is registered by the end of the income year (the post-deadline year) beginning next after the end of the application period,—

(i)

the trust has a trust deed; and

(ii)

the income year ends after the day on which the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 receives the Royal assent; and

(iii)

for an income year that includes part of the application period or is the post-deadline year, the trust is registered before the end of the post-deadline year and is not deregistered before the foreign-sourced amount is derived; and

(iv)

for an income year beginning after the end of the post-deadline year, the trust is registered when the foreign-sourced amount is derived; and

(v)

the trustee complies with the requirements under sections 22, 59B, 59C, and 59D of the Tax Administration Act 1994 that the trustee must meet during the income year; and

(d)

for a foreign trust to which paragraph (c) does not apply,—

(i)

the trust has a trust deed; and

(ii)

the trust is registered at the beginning of the income year; and

(iii)

the trust is registered when the foreign-sourced amount is derived; and

(iv)

the trustee complies with the requirements under sections 22, 59B, 59C, and 59D of the Tax Administration Act 1994 that the trustee must meet during the income year; and

(e)

the amount is not beneficiary income derived by a minor that is treated as if it were trustee income.

Time for compliance with requirements

(1B)

For a trustee to satisfy subsection (1)(c)(v) or (d)(iv) for an income year, the trustee must—

(a)

comply in the income year with the requirements referred to in the subparagraph:

(b)

satisfy the Commissioner that the trustee made reasonable efforts in the income year to comply with the requirements referred to in the subparagraph and corrected the failure to comply within a reasonable period of time after the trustee became aware of the failure.

When subsection (3) applies[Repealed]

(2)

[Repealed]

When knowledge offence committed[Repealed]

(3)

[Repealed]

Exception[Repealed]

(4)

[Repealed]

Defined in this Act: beneficiary income, Commissioner, exempt income, foreign-sourced amount, foreign trust, income year, minor, New Zealand resident, non-resident, settlor, superannuation fund, transitional resident, trustee, trustee income

Compare: 2004 No 35 s HH 4(3B), (3BB), (3BC)

Section HC 26(1): amended, on 23 March 2020, by section 140(1) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section HC 26(1)(a): amended, on 23 March 2020, by section 140(2) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section HC 26(1)(ab): inserted, on 23 March 2020, by section 140(3) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section HC 26(1)(b)(ii): amended, on 21 February 2017, by section 6(1) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26(1)(c): inserted, on 21 February 2017, by section 6(2) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26(1)(d): inserted, on 21 February 2017, by section 6(2) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26(1)(d)(iv): amended, on 23 March 2020, by section 140(4) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section HC 26(1)(e): inserted, on 23 March 2020, by section 140(5) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section HC 26(1B) heading: inserted, on 21 February 2017, by section 6(3) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26(1B): inserted, on 21 February 2017, by section 6(3) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26(2) heading: repealed, on 21 February 2017, pursuant to section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26(2): repealed, on 21 February 2017, by section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26(3) heading: repealed, on 21 February 2017, pursuant to section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26(3): repealed, on 21 February 2017, by section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26(4) heading: repealed, on 21 February 2017, pursuant to section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26(4): repealed, on 21 February 2017, by section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Section HC 26 list of defined terms beneficiary income: inserted, on 23 March 2020, by section 140(6) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section HC 26 list of defined terms minor: inserted, on 23 March 2020, by section 140(6) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section HC 26 list of defined terms non-resident: inserted, on 23 March 2020, by section 140(6) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section HC 26 list of defined terms trustee income: inserted, on 23 March 2020, by section 140(6) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).