HC 35Beneficiary income of minors

1. This section applies when a person who is a minor derives an amount of beneficiary income from a trust in an income year. Subsection (4) and sections HC 36 and HC 37 override this subsection.

2. The amount is—

3. excluded income of the minor under section CX 58 (Amounts derived by minors from trusts); and
4. treated as trustee income for the purposes of who pays the relevant tax and who provides the return of income; and
5. subject to the basic rate of income tax set out in schedule 1, part A, clause 15.

6. For the purposes of this section, and sections HC 36, HC 37, LE 4, and LF 2 (which relate to the treatment of tax credits of beneficiary minors), a minor is a natural person resident in New Zealand who is under 16 years of age on the trust’s balance date for the income year.

7. This section does not apply to—

8. a minor who, for the income year, derives 1 or more of the following:
   1. beneficiary income from the trust of $1,000 or less:
   2. a child disability allowance paid under the Social Security Act 2018:
   3. a disability allowance paid under the Social Security Act 2018:
9. beneficiary income derived from the trust if the trust is—
   1. settled in a way described in section HC 36:
   2. a testamentary trust described in section HC 37:
   3. a disabled beneficiary trust described in section HC 39:
   4. a Maori authority:
   5. a group investment fund.

10. This section overrides sections HC 5, HC 18 to HC 20, HC 22, HC 23, and HC 32.