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Income Tax Act 2007

Definitions and related matters - Associated persons and nominees - Table Y1: Associated person rules

YB 8: Trustee and settlor

You could also call this:

"When you set up and manage a trust, you have special rules to follow."

Illustration for Income Tax Act 2007

You are a trustee of a trust and a settlor of the trust, which makes you associated persons. A trustee is someone who manages the trust and a settlor is someone who sets up the trust. This rule does not apply if the trust is a tax charity. You need to know that a tax charity is a type of charity that is registered for tax purposes. If the trust is a tax charity, the rule about associated persons does not apply. This is stated in the legislation. Note that the legislation has been amended, or changed, at various times, including by the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 and the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024. These changes have been made to update the rules about associated persons and tax charities. The changes are part of the law now.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1523014.

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YB 7: Two trustees with common settlor, or

"Trustees of different trusts created by the same person or their partner are associated"

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YB 9: Settlor and beneficiary, or

"Trust creators and their beneficiaries are considered connected"

Part YDefinitions and related matters
Associated persons and nominees: Table Y1: Associated person rules

YB 8Trustee and settlor

  1. A trustee of a trust and a settlor of the trust are associated persons.

  2. This section does not apply if the trust is a tax charity.

Notes
  • Section YB 8: substituted, on , by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
  • Section YB 8(2): amended, on , by section 119(1) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
  • Section YB 8 list of defined terms charitable trust: repealed, on , by section 119(2) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
  • Section YB 8 list of defined terms tax charity: inserted, on , by section 119(2) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).