Settlors in the Minor Beneficiary Regime

The adoption of mildly progressive taxation by the New Zealand government in the early 2000s meant that it became more attractive for parents to channel income to their children via trusts. This development led to the passage of the Taxation (Beneficiary Income of Minors, Services-Related Payments and Remedial Matters) Act 2001. The terms “settlor” and “settlement” are pivotal in the architecture of the minor beneficiary regime. The article provides definitions of these terms and explains how the minor beneficiary regime fits into the structure of the Income Tax Act 1994. The regime remains in the Income Tax Act 2007