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IRD advises on CRS and NZFI trusts reporting

09 October 2018

The Inland Revenue Department says it continues to receive inquiries about trusts and the Common Reporting Standard (CRS), particularly reporting New Zealand Financial Institution (NZFI) trusts such as managed family trusts, trustee documented trusts, foreign trusts, and corporate trustees.

IRD says the crux for the CRS and a trust is whether it has any "foreign tax resident" connections.

"It is an inherently complex OECD initiative, so Inland Revenue has developed guidance with useful examples, to help navigate through the CRS. The following will help get you started:

  1. Whether a trust is considered a reporting NZFI for CRS purposes? (there is a wide definition)
  2. Whether a trust needs to report to Inland Revenue?  (due diligence obligations)  
  3. What and how does a trust need to report?
    Guidance on the CRS for AEOI IR 1048 (sections 1.6, 1.7 and 6)
    Common Reporting Standard (CRS) - registration and reporting user guide.

IRD says if a trust is a financial institution, the relevant account holders of the trust would be:

  • the settlor,
  • all beneficiaries (including discretionary beneficiaries that receive distributions),
  • any other natural person that controls the trust; and
  • any person that has provided a loan to the trust.

Last updated on the 16th September 2019