Wednesday, July 13, 2016
The New Zealand Government announced on July 13 that it would create a register of foreign trusts, searchable only by regulatory agencies.
The Government said the measure is one of a number it will implement as a result of the Shewan Inquiry into foreign trust disclosure rules. A bill to introduce the changes will be introduced in August 2016.
Among the measures, foreign trusts will be required to register on establishment using an expanded version of the current disclosure form IR 607. This must also include signed declaration that the person establishing the foreign trust, the settlor(s), and the trustees have been advised of and have agreed to provide the information to comply with: the record keeping requirements in the Tax Administration Act; the Anti-Money Laundering and Countering Financing of Terrorism Act and Regulations; and the Automatic Exchange of Information/Common Reporting Standard requirements (once enacted).
The information required to be disclosed to the tax authority when a foreign trust registers is to be expanded from the current IR 607 disclosures to include the name, email address, foreign residential address, country of tax residence, and Tax Identification Number of: the settlor or settlors; the protector (if there is any); non-resident trustees; any other natural person who has effective control of the trust (including through a chain of control or ownership); and beneficiaries of fixed trusts, including the underlying beneficiary where a named beneficiary is a nominee. Additional rules apply for discretionary trusts.
"The changes to the foreign trust rules are a matter that the Government intends to move quickly on. The Government intends to introduce legislation to require a register that is searchable by Internal Affairs and the Police, and annual disclosure requirements in the coming months," Finance Minister Bill English said.
"The Government has always been open to making improvements to New Zealand's already strong tax settings if that was warranted," he added. "The Shewan Inquiry's recommendations are sensible and well-reasoned and by acting on all of them, we will ensure that our foreign trust disclosure rules are strengthened and New Zealand's reputation is protected."