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Income Tax Act 2007

Taxation of certain entities - Trusts

HC 8: Amounts received after person’s death

You could also call this:

"Money received after someone dies is treated as their income if it arrives within 28 days"

Illustration for Income Tax Act 2007

When someone dies, their estate's trustee gets some money. You need to know if this money would have been the person's income if they were alive. The trustee can treat some of this money as if the person got it before they died. If the trustee gets money within 28 days of the person's death, they can treat it as the person's income. You can find more information about this in section CV 12. Any other money the trustee gets is treated as their own income. The trustee has to follow these rules when dealing with the person's estate. You can look at HH 8 to see how this used to work. The rules changed on 1 April 2022, because of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517269.

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HC 7: Trustee income, or

"Money a trustee earns that isn't given to someone else, which is taxed"

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HC 8B: Income in income year of person’s death and following 3 income years, or

"Tax on income after someone dies, for 4 years"

Part HTaxation of certain entities
Trusts

HC 8Amounts received after person’s death

  1. This section applies when a trustee of an estate of a deceased person receives an amount in an income year that is not income that the person derived during their lifetime, but would have been included in the person’s income had they been alive when it was received.

  2. The trustee may treat an amount of reportable income received by the trustee within the period of 28 days starting with the date of the person’s death as if it were income that was derived by the person before being received by the trustee.

  3. An amount not treated as being derived by the person under subsection (1B) is treated under section CV 12 (Trustees: amounts received after person’s death) as income derived by the trustee in the income year.

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Notes
  • Section HC 8(1B) heading: inserted (with effect on 1 April 2022), on , by section 77(1) (and see section 77(4) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
  • Section HC 8(1B): inserted (with effect on 1 April 2022), on , by section 77(1) (and see section 77(4) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
  • Section HC 8(2): amended (with effect on 1 April 2022), on , by section 77(2) (and see section 77(4) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
  • Section HC 8 list of defined terms reportable income: inserted (with effect on 1 April 2022), on , by section 77(3) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).