Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Taxation of certain entities - Trusts

HC 34: Taxable distributions from non-complying trusts

You could also call this:

“Tax on money from trusts that don't follow the rules”

If you get money from a trust that doesn’t follow the rules (called a non-complying trust), you might have to pay tax on it. This is called a taxable distribution. You’ll need to pay income tax on this money in the tax year you get it. The tax rate for this is set out in a special list called schedule 1, part A, clause 4.

You don’t have to pay this tax right away. Instead, you’ll pay it on your terminal tax date. This is the final date for paying any tax you owe for that year. You can find out when this date is by looking at section RA 13.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517358.

Topics:

Money and consumer rights > Taxes

HC 33: Choosing to satisfy income tax liability of trustee, or

“Choosing to pay a trust's income tax as a trustee, settlor, or beneficiary”

HC 35: Beneficiary income of minors, or

“How tax works for money given to children under 16 from trusts”

Part H Taxation of certain entities
Trusts

HC 34Taxable distributions from non-complying trusts

Income tax is imposed on a taxable distribution derived by a person in an income year from a non-complying trust under section BF 1(b) (Other obligations) at the basic rate set out in schedule 1, part A, clause 4 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits).
The income tax is payable on the person’s payment date for terminal tax under section RA 13 (Payment dates for terminal tax) for the corresponding tax year.

Compare

2004 No 35 s HH 3(4)

Notes

Section HC 34(1): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).