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Trust and Estate’s Income Tax Return Form and Guide– IR 6

Trustees, executor or administrator of a deceased person’s estate shall complete an IR 6 income tax return each year. Broadly, an IR 6 comprises of the income tax return (IR 6), financial statement summary (IR 10) and potentially a beneficiary distribution form (IR 6B).

Generally, income of an estate or trust will be subject to income tax in New Zealand if it has a source in New Zealand regardless of the residency of the trustee.

Usually, the due date of the Trust’s income tax return is 7 July 2021 after the lapse of the financial year but may be extended to 31 March of the subsequent year if the Trust has an extension of time, for instance linked with a tax agent. Where the Trust is in a tax payable position but did not file the return and pay tax on time, IRD may impose interest and penalties.

IRD Voluntary Disclosure Helo

Trustee is also liable for New Zealand income tax on income derived outside New Zealand where any settlor of the trust is resident in New Zealand at any time during the income year, or if the estate has a New Zealand trustee and the deceased was resident in New Zealand.

Income of a trust is either trustee or beneficiary income. Trust income allocated as beneficiary income is taxable income unless exemption applies. In addition to allocating beneficiary income, a trustee can make distributions to beneficiaries. The distribution can include the following:

  • Tax paid profits
  • Capital gains of the trust
  • Corpus of the trust (capital contributed to set up the trust)
  • (for a foreign trust) non-taxed profits such as foreign sourced income

Generally, a distribution to a New Zealand resident beneficiary from:

  • a complying trust is not taxable;
  • a foreign trust is taxable, to the extent it is not part of the corpus or capital gains; or
  • a non-complying trust is taxed at 45%, to the extent it is not part of the corpus.

A trust’s tax residency and trust classification (i.e. complying, foreign or non-complying) are based on tax residency of settlor(s) for income tax purposes. Where a settlor(s) moves to and from New Zealand, this may impact the residency of the trust and, therefore, the income tax treatment of beneficiary distributions. Where the complying trust becomes a non-complying trust due to the change in the tax residency of the settlor, the beneficiary distribution’s income tax treatment shall change from non-taxable to taxable at 45%. However, certain election can be made to ensure a non-complying trust becomes a complying trust when settlors’ tax residency changes so future beneficiary distributions can still treated as non-taxable.

You can find more about income tax returns here.



IR6 guide

IR6 Guide

Please note the guide(s)/form(s) were the latest version at the time this web page was finalised. If you need the latest form/guide, please visit IRD’s website at here.

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