The taxation of offshore investment income is the subject of an increasing focus of legislative activity throughout the world. The reason is that offshore investment gives rise to problems of residence and of source, caused in particular by the interposition of non-natural persons between income...

Without a controlled foreign company regime, taxpayers can establish companies in other countries to trap foreign-source income or accept income diverted from domestic sources. At one extreme, a regime may cover all foreign jurisdictions. At another, it may cover only tax havens. Some countries...

Until the early 1990s New Zealand policy was to tax residents on their worldwide income and non-residents on income derived from New Zealand. The policy changed slightly in the 1990s when it became clear that taxing non-residents on income derived in New Zealand was a disincentive to foreign...

Exemption of financial services from Value Added Tax (VAT) is commonly accepted as being an anomaly in the New Zealand goods and services tax legislation. While exempting financial services from VAT is attractive to the legislature because it is a simple way of addressing the difficulties of...

The basic policy of the Australian rules of trust taxation are much the same as New Zealand’s but the rules themselves differ in a number of respects. The objective of the Australian rules seems to have been to frustrate avoidance strategies as they were discovered, rather than to deploy a...

The trust is the most useful device that New Zealand offers to non-residents in the field of international tax planning. So long as settlors, beneficiaries, and income are all foreign the trust is unlikely to attract New Zealand tax. The residence of the trustee has no effect on the tax benefits...

The problems that result from the ectopic nature of income tax law are acute and resistant to cure. There are many elements of income taxation that cause problems in the international arena, including the concept of space and source of income. However, the most pervasive tax-related problem in...

International aspects of New Zealand’s trust regime are driven by three things. First, operating independently of the trust regime is New Zealand’s policy to tax all income that has a New Zealand source. Secondly, there is the structural factor of the trust regime that trusts themselves are...

“Ectopia” is a label given here to a feature of tax law that distinguishes it from most other forms of law. Income tax law is dislocated from the facts to which it relates. This dislocation leaves a gap, or “ectopia” between tax laws and the economic facts of the transactions or...

Sections 226 to 233 of the New Zealand Income Tax Act 1976 contain a special regime for the taxation of trusts. Income that is distributed by the trustee is taxed in the hands of the beneficiary, and income that is accumulate is taxed in the hands of the trustee. The regime contains a number of...