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Income Tax Act 2007

Taxation of certain entities - Trusts

HC 17: Amounts derived as beneficiary income

You could also call this:

“Money you receive from trusts and when it counts as your income”

When you get money from a trust as a beneficiary in a year, it’s usually counted as your income. This is covered in [section CV 13(a)]. But there are some exceptions to this rule.

If you’re a young person (called a minor), the money you get from a trust isn’t counted as your income. Instead, it’s treated as the trust’s income. This is explained in [sections CX 58] and [HC 35].

For certain types of companies (called close companies), there’s a special rule too. If a close company gets money from a trust, it’s not counted as the company’s income. Instead, it’s treated as the trust’s income. This is covered in [section CX 58B] and [section HC 38].

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517300.

Topics:
Money and consumer rights > Taxes
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Part H Taxation of certain entities
Trusts

HC 17Amounts derived as beneficiary income

  1. An amount that a person derives in an income year as beneficiary income is income of the person under section CV 13(a) (Amounts derived from trusts), except to the extent to which it is beneficiary income to which section HC 35 or HC 38 applies.

  2. Subsection (1) does not apply to beneficiary income derived by a minor. The beneficiary income is excluded income of the minor, and treated as trustee income under sections CX 58 (Amounts derived by minors from trusts) and HC 35.

  3. Subsection (1) does not apply to beneficiary income derived by a close company to which section HC 38 applies. The beneficiary income is excluded income of the company under section CX 58B (Amounts derived by certain close companies from trusts) and treated as trustee income under section HC 38.

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Notes
  • Section HC 17(1) heading: replaced, on , by section 91(1) (and see section 91(5) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
  • Section HC 17(1): amended, on , by section 91(2) (and see section 91(5) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
  • Section HC 17(3) heading: inserted, on , by section 91(3) (and see section 91(5) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
  • Section HC 17(3): inserted, on , by section 91(3) (and see section 91(5) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
  • Section HC 17 list of defined terms close company: inserted, on , by section 91(4) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).