Why a NZ Bank Account May Not Solve the Australia Trust Issue

Last week I mentioned the Australia issue with NZ trusts.

The thing people often say next is, “Well, could we just leave the money in New Zealand?”

Or, “What if it goes into a NZ bank account?”

And I get why people ask that. From a normal family point of view, it feels like Mum and Dad’s money. It came from New Zealand. The trust is in New Zealand. The bank account is in New Zealand.

But that is not really how tax residency works.

If the person receiving the money lives in Australia, the Australian tax position still needs to be considered.

And NZ bank accounts are not invisible. Banks collect information about foreign tax residents, and that information can be reported to Inland Revenue and shared with overseas tax authorities, including Australia.

So the answer is not really “just leave it in New Zealand”.

The answer is, please get advice before the money moves.

Because once the distribution has been made, everyone is usually trying to fix something that should have been looked at earlier.