New Zealand Law Society - Over 1800 foreign trusts deregistered

Over 1800 foreign trusts deregistered

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Between 21 February 2017 and 20 June 2017, 1,820 foreign trusts deregistered, Revenue Minister Judith Collins says.

Ms Collins provided the information in response to a written question from Green MP James Shaw.

Changes to the law on 21 February meant that foreign trusts existing or established after that date need to register with the Inland Revenue Department. Registration allows foreign trusts to receive a tax exemption for foreign-sourced income.

In response to a further question from Mr Shaw on the highest total number of New Zealand foreign trusts ever registered with IRD, Ms Collins said Inland Revenue does not record the number of applications for registration it receives on a daily basis.

"I am advised that 11, 750 New Zealand foreign trusts were registered as at 23 December 2016. This is the highest total number of registered trusts at a single point in time," she said.

Mr Shaw asked for the total number of New Zealand foreign trusts that had reregistered since 21 February 2017.

"I am advised that since the date of enactment of the new foreign trust disclosure regime on 21 February 2017, Inland Revenue has received 515 applications for registrations of New Zealand foreign trusts up to 20 June 2017," Ms Collins said.

"These are not reregistrations as the previous regime did not require New Zealand foreign trusts to register."

Quoting an Inland Revenue spokesperson, the Stuff website says fewer than 3000 foreign trusts met a deadline last week for them to provide more information about their structures and activities.

"About 3000 trusts had told Inland Revenue [by 30 June 2017] they didn't want to be part of the new registration regime, a spokesman said, and the tax department hadn't heard from the balance of about 5000 trusts, meaning they also could no longer legally operate in New Zealand."

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