Income Tax Act 2007

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

YB 16: Exceptions for certain trusts and charitable organisations

You could also call this:

"Some trusts and charities don't have to follow all the tax rules."

You do not have to follow some rules if you are a trustee of a special trust. These trusts are lines trusts set up under the Energy Companies Act 1992 or approved unit trusts. You can find out more about approved unit trusts in the Income Tax Act (Exempt Unit Trusts) Order 1990.

If you are a trustee or a settlor and the beneficiary is a charitable organisation, some rules do not apply to you. This is because of sections YB 6(1) and YB 9(1) in the Income Tax Act 2007.

Sometimes you might be part of a financial arrangement with a securitisation trust. You are also a beneficiary of another trust set up to secure rights and obligations for the securitisation trust. In this case, you are not associated with the securitisation trust if you would be associated only because of the financial arrangement.

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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=DLM1523034.

YB 15: Exceptions for employee trusts, or

"When trusts are set up for employees and not controlled by related parties"

YB 16B: Limited partnerships treated as companies, or

"Limited partnerships are treated like companies for some tax rules."

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

YB 16Exceptions for certain trusts and charitable organisations

Sections YB 5 and YB 6(1) do not apply to a trustee and another person if the trust is—
a lines trust established under the Energy Companies Act 1992:
an approved unit trust referred to in clause 2 of the Income Tax Act (Exempt Unit Trusts) Order 1990.

Sections YB 6(1) and YB 9(1) do not apply to a trustee and a beneficiary or a settlor and a beneficiary if the beneficiary is a charitable organisation.
A person that is a party to a financial arrangement with a securitisation trust and is also a beneficiary of a trust (the security trust) established for the main purpose of securing to the security trust’s beneficiaries rights and obligations in relation to the securitisation trust is not associated with the securitisation trust if, but for this subsection, the person and the securitisation trust are associated due to 1 or more of the following reasons:
the person is a settlor of the securitisation trust or of the security trust, because the person is a party to the financial arrangement:
the person has the power of appointment or removal for trustees of the securitisation trust or for trustees of the security trust, because the person is a party to the financial arrangement.

Notes

Section YB 16: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YB 16(3) heading: inserted, on 30 March 2025, by section 141(1) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
Section YB 16(3): inserted, on 30 March 2025, by section 141(1) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
Section YB 16 list of defined terms financial arrangement: inserted, on 30 March 2025, by section 141(2) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
Section YB 16 list of defined terms securitisation trust: inserted, on 30 March 2025, by section 141(2) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
Section YB 16 list of defined terms settlor: inserted, on 30 March 2025, by section 141(2) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
Section YB 16 list of defined terms trustee: inserted, on 30 March 2025, by section 141(2) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).