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Income Tax Act 2007

Taxation of certain entities - Trusts

HC 5: Amounts derived by trustees

You could also call this:

“How trustees categorise income they receive or are deemed to receive”

When you’re a trustee of a trust and you receive income in a year, it can be one of two types. The first type is called beneficiary income, which is explained in section HC 6. The second type is called trustee income, which is explained in section HC 7.

Sometimes, the law might say you have income even if you didn’t actually receive any money. In these cases, you treat this ‘pretend’ income as if you really got it during that year. This rule applies when thinking about beneficiary income and trustee income too.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517261.

Topics:
Money and consumer rights > Taxes
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HC 4: Corpus of trust, or

“Property settled on a trust, excluding certain types”

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HC 6: Beneficiary income, or

“Income given to trust beneficiaries within specific timeframes”

Part H Taxation of certain entities
Trusts

HC 5Amounts derived by trustees

  1. An amount of income derived in an income year by a trustee of a trust is either—

  2. beneficiary income under section HC 6; or
    1. trustee income under section HC 7.

      1. For the purposes of subsection (1) and sections HC 6 and HC 7, if the trustee is treated as having an amount of income in the income year under a provision in this Act and the amount is not derived under ordinary concepts, then the amount is treated as derived in the income year.

      Compare
      • 2004 No 35 s OB 1 beneficiary income, trustee income