New Zealand Trusts and Australian Beneficiaries: The Trap Families Miss

The Australia issue with trusts is one of the ones I find hardest.

It looks a bit like this - Mum and Dad worked hard, paid tax, bought a house, saved what they could, and set up a trust because someone told them it was sensible at the time.

They assume that when they are gone, their children will inherit through the trust. NZ has no inheritance tax so, no great drama. Right? But if there are children living in Australia, and the money is not coming from an estate in the simple way everyone imagined, but from a New Zealand trust this is when things can get nasty.

Depending on the circumstances, Australian tax can be a real issue. In some cases, up to 47% of that "inheritance" is at risk.

That is a painful thing to explain to a family after the fact. "Yes, you can try and deposit the funds into a NZ bank account but there are reporting obligations to the IRD and that information is likely to be shared (I can tell you more about this in next week's post).

It is not what the parents thought they were leaving behind. And it is usually not because anyone did anything wrong. It is because no one checked whether the trust still worked once the children had moved overseas.

I would love to help get your trust situation in order, sooner rather than later.  Get in touch to make an appointment, in person or online.