HC 1What this subpart does

1. This subpart, together with the trust rules,—

2. provides for the taxation of distributions from trusts, for this purpose defining—
   1. beneficiary income:
   2. a taxable distribution:
3. provides for the taxation of trustee income:
4. classifies trusts into the following 3 categories for the purposes of determining the treatment of distributions that are not beneficiary income:
   1. complying trusts:
   2. foreign trusts:
   3. non-complying trusts:
5. determines who is a settlor, and sets out their income tax liability:
6. sets out the treatment of trusts settled by persons becoming resident in New Zealand.

7. The trust rules do not apply to—

8. a unit trust:
9. a group investment fund to the extent to which it is treated as a company under this Act:
10. a Maori authority:
11. a distribution under section HZ 1 (Distributions from trusts of pre-1989 tax reserves).

12. Section 59 of the Tax Administration Act 1994 requires the disclosure of a settlement on a trust with a non-resident trustee.

13. Section GB 22 (Arrangements involving trust beneficiary income) may apply to treat a beneficiary as receiving property, or enjoying services or benefits, in fact received, or enjoyed, by another person.

14. A superannuation scheme that is treated as a company because it is a unit trust and then becomes a superannuation fund is treated as—

15. liquidated under section CD 12 (Superannuation schemes entering trust rules) immediately before the date on which it becomes a superannuation fund; and
16. no longer a company.

Compare

• 2004 No 35 ss GC 14, HH 1(8), (9), HH 3(6), HH 4(8)
• Income Tax Amendment Act 1988 (No 5) s 9