New Zealand law provides for no special tax consequences on the formation of trusts. Transfers to trusts are taxable or non-taxable pursuant to the same rules that apply in respect of transfers to other people or entities. However, because there is more likely to be an element of gift in...

Under the New Zealand Income Tax Act 1994, taxpayers aggregate their gross income and subtract allowable deductions and losses carried forward from earlier years. The result is taxable income. The statutory rules for the taxation of trusts are set out in subpart HH of the Act. There are four...

In the mid 1990s, New Zealand began a project to rewrite the country’s income tax legislation. The first step of the rewrite was to reorder and reenact the 1976 Income Tax Act as the Income Tax Act 1994. Although the rewrite attempted clarify and simplify the legislation to make it more...

Historically, courts have been unwilling to adopt a purposive approach to the interpretation of tax statutes. In 1996, as part of a process of rewriting the Income Tax Act 1994, Parliament inserted a number of provisions into the Act that appeared to be calculated to require the courts to...

Since 1988, New Zealand has employed a full imputation system for the taxation of companies. That is, all tax paid at the corporate level can be imputed to shareholders when companies distribute dividends. The intention is that company profits should bear tax once only, not twice. Companies are...

In 2003 the Australian and NZ governments enacted legislation to permit trans-Tasman companies to allocate to their shareholders franking credits and imputation credits. This legislation is known as the pro rata allocation method, and was heralded as a major improvement in trans-Tasman taxation....

With the growth of electronic commerce tax authorities were faced with the challenge of applying traditional tax principles, which have been developed in times where business comprised the delivery of physical goods and services were provided in face-to-face transactions, to cross-border...

New Zealand is in general a high tax country. It is host to a thriving offshore trust industry established after an amendment to the income tax legislation in 1987. The successor to this amendment is section HC 26(1), which means that where non-residents settle income-producing property on New...

There is an active but unpublicised industry of New Zealand trustees who look after foreigners’ money. Also, taxpayers from other countries sometimes use New Zealand as a haven. Some trustees for foreign funds have a reasonably substantial presence in New Zealand; others may be single-purpose...

In 1944, Martin Crowe, a Catholic priest, wrote a doctoral dissertation titled The Moral Obligation of Paying Just Taxes. His dissertation summarized and analyzed 500 years of theological and philosophical debate on this topic, which identified three basic philosophical positions on the issue....