Income Tax Act 2007

Taxation of certain entities - Trusts

HC 26: Foreign-sourced amounts: resident trustees

You could also call this:

"Money from overseas that New Zealand resident trustees don't have to pay tax on"

If you are a New Zealand resident trustee, you might not have to pay tax on some money you get from another country. This money is exempt from tax under section CW 54 if certain conditions are met. You must meet these conditions to not pay tax on the money you get from another country.

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This page was last updated on 20 May 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517324.

HC 25: Foreign-sourced amounts: non-resident trustees, or

"Rules for taxing overseas income of non-resident trustees"

HC 27: Who is a settlor?, or

"Explanation of who counts as a settlor for a trust"

Part HTaxation of certain entities
Trusts

HC 26Foreign-sourced amounts: resident trustees

A foreign-sourced amount that a New Zealand resident trustee derives in an income year, and is included in trustee income for the income year, is exempt income under section CW 54 (Foreign-sourced amounts derived by trustees) if—
no settlor of the trust is at any time in the income year a New Zealand resident who is not a transitional resident or, if no settlor exists in the income year, the last surviving settlor was a non-resident when that settlor ceased to exist; and
no election under section HC 33 has been made for the trust; and
the trust is not—
1. a superannuation fund; or
2. a testamentary trust or an inter vivos trust of which a settlor died resident in New Zealand (whether or not they died in the income year); and
for a trust for which a resident trustee applies for registration within the period (the application period) given by section 59C of the Tax Administration Act 1994 and that is registered by the end of the income year (the post-deadline year) beginning next after the end of the application period,—
1. the trust has a trust deed or a will or other document that creates and governs the trust; and
2. the income year ends after the day on which the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 receives the Royal assent; and
3. for an income year that includes part of the application period or is the post-deadline year, the trust is registered before the end of the post-deadline year and is not deregistered before the foreign-sourced amount is derived; and
4. for an income year beginning after the end of the post-deadline year, the trust is registered when the foreign-sourced amount is derived; and
5. the trustee complies with the requirements under sections 22, 59B, 59C, and 59D of the Tax Administration Act 1994 that the trustee must meet during the income year; and
for a trust to which paragraph (c) does not apply,—
1. the trust has a trust deed or a will or other document that creates and governs the trust; and
2. the trust is registered at the beginning of the income year; and
3. the trust is registered when the foreign-sourced amount is derived; and
4. the trustee complies with the requirements under sections 22, 59B, 59C, and 59D of the Tax Administration Act 1994 that the trustee must meet during the income year; and
the amount is not beneficiary income derived by a minor that is treated as if it were trustee income under section HC 35(2); and
the amount is not beneficiary income derived by a close company that is treated as if it were trustee income under section HC 38(3).

Notes

For a trustee to satisfy subsection (1)(c)(iii), (iv), or (v) or (d)(ii), (iii), or (iv) for an income year, the trustee must—
comply in the income year with the requirements referred to in the subparagraph:
satisfy the Commissioner that the trustee made reasonable efforts in the income year to comply with the requirements referred to in the subparagraph and to remedy the non-compliance.

Repealed
Repealed
Repealed

Compare

2004 No 35 s HH 4(3B), (3BB), (3BC)

Notes

Section HC 26(1): amended (with effect on 1 April 2023), on 28 March 2024, by section 93 of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
Section HC 26(1): amended, on 23 March 2020, by section 140(1) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
Section HC 26(1)(a): amended, on 23 March 2020, by section 140(2) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
Section HC 26(1)(ab): inserted, on 23 March 2020, by section 140(3) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
Section HC 26(1)(b)(ii): amended, on 21 February 2017, by section 6(1) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26(1)(c): inserted, on 21 February 2017, by section 6(2) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26(1)(c): amended, on 1 April 2023, by section 78(2) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
Section HC 26(1)(c)(i): amended (with effect on 21 February 2017), on 31 March 2023, by section 78(3) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
Section HC 26(1)(d): inserted, on 21 February 2017, by section 6(2) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26(1)(d): amended, on 1 April 2023, by section 78(4) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
Section HC 26(1)(d)(i): amended (with effect on 21 February 2017), on 31 March 2023, by section 78(5) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
Section HC 26(1)(d)(iv): amended, on 23 March 2020, by section 140(4) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
Section HC 26(1)(e): replaced, on 1 April 2025, by section 72(1) (and see section 72(3) for application) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
Section HC 26(1)(f): inserted, on 1 April 2025, by section 72(1) (and see section 72(3) for application) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
Section HC 26(1B) heading: inserted, on 21 February 2017, by section 6(3) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26(1B): inserted, on 21 February 2017, by section 6(3) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26(1B): amended, on 1 April 2023, by section 78(6) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
Section HC 26(1B)(b): replaced, on 1 April 2023, by section 78(7) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
Section HC 26(2) heading: repealed, on 21 February 2017, pursuant to section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26(2): repealed, on 21 February 2017, by section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26(3) heading: repealed, on 21 February 2017, pursuant to section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26(3): repealed, on 21 February 2017, by section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26(4) heading: repealed, on 21 February 2017, pursuant to section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26(4): repealed, on 21 February 2017, by section 6(4) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
Section HC 26 list of defined terms beneficiary income: inserted, on 23 March 2020, by section 140(6) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
Section HC 26 list of defined terms close company: inserted, on 1 April 2025, by section 72(2) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
Section HC 26 list of defined terms minor: inserted, on 23 March 2020, by section 140(6) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
Section HC 26 list of defined terms non-resident: inserted, on 23 March 2020, by section 140(6) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
Section HC 26 list of defined terms trustee income: inserted, on 23 March 2020, by section 140(6) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).