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Income Tax Act 2007

Taxation of certain entities - Trusts

HC 24: Trustees’ obligations

You could also call this:

"What trustees must do about income tax"

Illustration for Income Tax Act 2007

You are a trustee and you must pay income tax on the taxable income you get. You pay tax as if you were an individual getting the income. You cannot get some tax credits, like those under subparts LC and LD. You must follow some rules when working out your tax. Section HC 35 applies when a minor gets beneficiary income. Section HC 38 applies when a close company gets beneficiary income. You can use section DV 9(2) to work out your deductions. But some other rules, like sections CX 40 and DV 1 to DV 4, are more important and override this rule.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517320.

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Money and consumer rights > Taxes
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Part HTaxation of certain entities
Trusts

HC 24Trustees’ obligations

  1. A trustee must satisfy the income tax liability for their taxable income as if they were an individual beneficially entitled to the trustee income.

  2. In determining the income tax liability, the trustee is not entitled to have a tax credit under subparts LC and LD (which relate to tax credits for natural persons and for certain gifts).

  3. Section HC 35 applies to treat beneficiary income derived by a minor as if it were trustee income.

  4. Section HC 38 applies to treat beneficiary income derived by a close company that meets the requirements of the section as if it were trustee income.

  5. Section DV 9(2) (Trusts) applies for the purposes of calculating a trustee’s deductions.

  6. Sections CX 40, and DV 1 to DV 4 (which relate to superannuation funds) override this section.

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Notes
  • Section HC 24(2) heading: replaced (with effect on 1 April 2009), on (applying for the 2009–10 and later income years), by section 83(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
  • Section HC 24(2): replaced (with effect on 1 April 2009), on (applying for the 2009–10 and later income years), by section 83(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
  • Section HC 24(3B) heading: inserted, on , by section 92(1) (and see section 92(3) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
  • Section HC 24(3B): inserted, on , by section 92(1) (and see section 92(3) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
  • Section HC 24 list of defined terms cash basis person: repealed (with effect on 1 April 2009), on , by section 87 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section HC 24 list of defined terms close company: inserted, on , by section 92(2) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).