Inland Revenue takes steps to simplify trust disclosure requirements
You may recall from our April 2025 client update that Inland Revenue had completed its review of the New Zealand domestic trust disclosure rules. These rules require trustees of taxable trusts (with estates and non-active trusts exempted) to prepare financial statements and disclose details of settlements, settlors, distributions, beneficiaries, and other key information.
Inland Revenue’s intention to simplify compliance
Following its review, Inland Revenue signalled an intention to simplify the disclosure regime and reduce compliance costs. However, it did not specify how those changes would be implemented.
Repeal of specific domestic trust disclosure provisions now proposed
The recently introduced Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill now provides insight into Inland Revenue’s approach. Among its proposals, the Bill would repeal sections 59BA and 59BAB of the Tax Administration Act 1994, which currently underpin the domestic trust disclosure rules. This will apply from the 2026–27 and later income years.
Importantly, while the specific settlement, beneficiary and distribution disclosure provisions will be repealed, it is intended that the requirement for income-earning trusts to prepare and file financial statements with their tax returns will remain unchanged.
Rationale for the changes
According to the commentary accompanying the Bill, the rationale for removing the specific disclosure provisions is that the Commissioner of Inland Revenue already has broad powers under sections 33 and 35 of the Tax Administration Act to obtain information when required. The Commissioner considers these powers sufficient to collect trust-related information without the need for specific legislative disclosure rules.
What happens next
The Commissioner is currently considering what trust information will continue to be collected under those general powers. It remains possible that substantially the same information will continue to be requested from trustees, though the process for doing so may change.
Obligations for trustees and advisers
In the meantime, and regardless of the proposed repeal, trustees and advisors must continue to comply with the existing domestic trust disclosure rules when preparing 2025–26 tax returns.
Ongoing monitoring
We will continue to monitor developments in this area and provide further updates as Inland Revenue clarifies the future information requirements for trustees.
If you have any questions or need advice, please get in touch with a member of our Private Client or Tax teams.
Special thanks to Partner Lisa Small and Special Counsel Jo Giboney for preparing this article.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
