Photo: RNZ / Angus Dreaver
Finance Minister Nicola Willis says proposed changes exempting lower-income trusts from a higher tax rate are welcome, and would prevent over-taxation.
The previous Labour government proposed to bring in a new top tax rate for trusts of 39 percent, to match it to the top income tax rate.
The bill to change the rate is before the select committee, which recommended several exemptions, including:
- Trusts with $10,000 or less would continue to be taxed at the current 33 percent rate
- Estates remain at 33 percent for the year of death and the following three income years
- Disabled beneficiary trusts remain at the 33 percent rate instead of the personal tax rates of disabled beneficiaries
- Energy consumer trusts and legacy superannuation funds to be excluded from the 39 percent tax rate
Willis, in a statement, said she was delighted the select committee - which is chaired by government parties, which have a majority on the committee - had accepted the government's advice for a lower rate for lower-value trusts.
"This means that trusts with no more than $10,000 of trustee income per year will continue to be taxed at 33 percent rather than the top rate of 39 percent. As a result, only about 49,000 of the 400,000 trusts in New Zealand are likely to be impacted by the change to the top rate."
