Income Tax Act 2007

Taxation of certain entities - Trusts

HC 35: Beneficiary income of minors

You could also call this:

"Tax rules for money minors get from trusts"

When you are under 16 and get money from a trust, this rule applies. You are considered a minor if you live in New Zealand and are under 16 on the trust's balance date. This rule does not apply if you get $1,000 or less from the trust. If you get more than $1,000, the money is treated in a special way for tax. The money is not counted as your income, but it is counted as income for the trust. This means the trust pays tax on the money, not you. There are some exceptions to this rule, such as if the money comes from a special kind of trust or if you get a child disability allowance under the Social Security Act 2018. In these cases, the rule does not apply and the money is treated differently for tax. You can find more information about these exceptions in sections HC 36 and HC 37.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517360.

This page was last updated on 29 January 2026 — View changes

Topics:

Money and consumer rights > TaxesFamily and relationships > Children and parenting

HC 34: Taxable distributions from non-complying trusts, or

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

HC 36: Trusts and minor beneficiary rule, or

"Rules for when trusts give money to children"

Part HTaxation of certain entities
Trusts

HC 35Beneficiary income of minors

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.
The amount is—
excluded income of the minor under section CX 58 (Amounts derived by minors from trusts):
treated as trustee income for the purposes of determining the rate of tax that applies, who pays the relevant tax, and who provides the return of income.

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.
This section does not apply—
if the total amount of beneficiary income that the minor derives from the trust in the income year is $1,000 or less; or
to beneficiary income derived—
1. from a trust settled in the way described in section HC 36:
2. from a testamentary trust described in section HC 37:
3. from a Maori authority:
4. directly from a group investment fund:
5. by a person for whom a child disability allowance is paid under the Social Security Act 2018.

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

Compare

2004 No 35 ss HH 3A–HH 3C, HH 3E, HH 3F(2), (2A)

Notes

Section HC 35(4)(a): amended (with effect on 1 April 2008), on 6 October 2009, by section 266(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section HC 35(4)(b)(v): amended, on 26 November 2018, by section 459 of the Social Security Act 2018 (2018 No 32).