New Zealand has a range of tax regimes that can apply, including income tax, trust taxes and property-related taxes.

• Personal income tax based on a progressive tax system, with rates ranging from 10.5% for income up to NZD15,600 to the highest rate of 39% for income earned above NZD180,000.
• The trustee tax rate is set at 39%, effective from 1 April 2024 (although trust income distributed to beneficiaries will be taxed at the income tax rate applicable to that individual, rather than 39%).
• The “bright-line” test is a capital gains tax, which applies to residential properties sold within two years of purchase (for properties bought on or after 1 July 2024). The capital gain will be taxed at the relevant income tax rate. There are some exceptions, including an exemption for the “main home”.
• Presently no inheritance tax or gift duty applies.
• Goods and Services Tax (GST) 15% – applicable to most goods and services.

There are currently no estate, inheritance or gift taxes in New Zealand. There are no exemptions applicable.

It is common for independent and up-to-date market valuation to be carried out before transferring residential property into a trust. This is done for the purposes of establishing an up-to-date “base-line” value, and is particularly relevant if the property has appreciated in value since its original acquisition (but prior to transferring that property into a trust).

Following the transfer into the trust, if the property needed to be sold within the bright-line period, for whatever reason, the base value established via the market valuation could be used, rather than the original, historical purchase price, when determining the capital gain and any tax payable under the bright-line rules. This circumstance can arise where a property is required to be sold sooner than anticipated – eg, on the breakdown of a marriage/relationship, or business failure.

Residential Land Withholding Tax (RLWT) applies to non-residents (or New Zealand citizens absent for significant periods) selling residential property within the bright-line period. The tax is deducted at settlement, typically at 5% of the sale price or 10.5% for properties sold within two years (post-1 July 2024).

RLWT acts as a prepayment and can be credited against the final tax liability when filing a tax return. A NZ company with a mix of NZ resident and non-NZ resident shareholders could potentially avoid offshore RLWT status and would attract the 28% company tax rate (lower than the trustee tax rate and top personal rate of 39%).

Recent and potential developments include the following.

• A wealth tax, inheritance tax, gift tax and/or a more comprehensive capital gains tax could be introduced in the future, depending on government policy, though no plans are confirmed as of 2025.
• Bright-line rules may be adjusted post-election, as seen historically.
• Historical bright-line rule changes include extensions to five years in 2018 (for properties bought on or after 29 March 2018) and ten years in 2021 (for properties bought on or after 27 March 2021).
• The original two-year bright-line period was reintroduced by the National government, effective 1 July 2024.
• As of 9 June 2025, the bright-line test taxes gains on residential property (excluding the main home) at the owner’s income tax rate. (Exemptions apply for the main home, inherited property, and certain trust transfers with rollover relief.) The various applicable periods are as follows:
1. two years for properties bought on or after 1 July 2024;
2. ten years for those bought between 27 March 2021 and 30 June 2024; and
3. five years for those bought between 29 March 2018 and 26 March 2021.

New Zealand has taken steps to address tax avoidance and enhance transparency by implementing OECD-aligned Base Erosion and Profit Shifting (BEPS) measures, including strengthened transfer pricing rules, anti-hybrid provisions and limits on interest deductions.

New Zealand participates in global information-sharing initiatives through full adoption of the Common Reporting Standard (CRS) into domestic law and a Model 1 Intergovernmental Agreement under the US FATCA regime. Both regimes mandate financial institutions to report foreign account holders to New Zealand’s Department of Inland Revenue for automatic exchange of information with applicable jurisdictions.

While New Zealand does not currently have a public beneficial ownership register, there have been proposals to introduce one in response to Financial Action Task force (FATF) recommendations. These measures do leave clients feeling more exposed to increasing disclosure requirements, which may deter some individuals from setting up effective structures.

There is also currently no system that publicly reveals the beneficial owners of companies and limited partnerships but this is under discussion under the Corporate Governance (Transparency and Integrity) Reform Bill. New Zealand remains an environment where careful use of trusts and limited partnerships may still offer a degree of privacy, provided that full compliance with tax and anti-money laundering laws is maintained.

It is common for the younger generation to need assistance from the older generation when entering the housing market.

Most banks require parental funding for home purchases to be classified as a “gift” for mortgage approval, although typically families prefer to treat it as a “loan” to retain control and ensure repayment is made in the future, or the benefits are able to be applied equally amongst family members.

Documenting financial assistance from parents as a loan, with a formal agreement, allows parents to recover funds if needed. This is particularly relevant when assistance is provided to a child and their spouse/partner – a break-up may split assets 50/50 under the Property (Relationships) Act 1976.

Structuring the assistance as a loan safeguards the funds for the family and child, preventing loss to an ex-spouse/partner. In the fullness of time, the parents can choose to forgive the debt owed, or offsetting the amount received by the child via their inheritance in the future, if there is a need to equalise benefits among siblings.

When putting in place a succession plan, it is essential to know and understand who the beneficiaries are, and to consider how any cross-border legal, tax or compliance issues may disrupt what is intended. This will require identifying all beneficiaries and evaluating cross-border legal or tax issues that could disrupt intentions.

For example, a distribution from a NZ trust to a UK resident beneficiary may trigger UK capital gains tax on unrealised gains in the trust, even if the UK link is recent.

Likewise, a distribution from a NZ estate may face inheritance tax in the beneficiary’s jurisdiction, depending on the beneficiary’s domicile and location of assets.

Specialist advice in the beneficiary’s jurisdiction is key to avoid unexpected tax or legal issues.

New Zealand does not have any forced heirship laws and generally honours testamentary intentions. However, legislative provisions like the Family Protection Act 1955, Property (Relationships) Act 1976 and Testamentary Promises Act 1949 impose restrictions that, in certain circumstances, can modify or override a will’s terms to ensure fairness or fulfil obligations.

The Family Protection Act 1955 imposes a moral duty on parents to provide adequate support and maintenance for their children. If a parent excludes a child from their will, that child can claim against the estate, arguing that the parent failed to meet this moral duty. If the claim succeeds, the court may adjust the will to the extent necessary to remedy the breach and provide adequate provision for the child’s support and maintenance.

The Testamentary Promises Act 1949 allows a person who was promised provision in a will for services provided (eg, caregiving) to claim against the estate if excluded. If the claim is upheld, the court may award provision from the estate, potentially reducing the share intended for children.

The Property (Relationships) Act 1976 entitles a spouse or de facto partner to claim a division of relationship property before the estate is distributed. If a claim is successful, the spouse or partner’s entitlement may take priority, reducing the estate available for distribution to children as per the will.

Claims under these acts can be resolved outside the court system through consensual agreements, provided all parties obtain independent legal advice.

The Property (Relationships) Act 1976 (PRA) governs property division for married, civil union and de facto partners (including same-sex couples) in New Zealand, applying to relationships of three years or more, or shorter with specific circumstances (eg, a child or significant contributions).

Property Classification

The PRA uses a deferred community property regime. Property is not automatically “joint” during the relationship but all “relationship property” is divided equally (50/50) upon separation or death, unless otherwise agreed.

• Relationship property – includes the family home, chattels, joint property, and income/assets acquired during the relationship, subject to equal sharing.
• Separate property – covers pre-relationship assets, inheritances or gifts, unless intermingled with relationship property (eg, using personal income to improve a separate asset).

Transfer of Property

A partner cannot transfer relationship property to defeat another’s PRA rights without consent. Key legislation and remedies available under the PRA, Family Proceedings Act 1980 (FPA) and common law include the following.

• Section 44 (PRA) – If property is transferred (e.g., to a trust) to defeat a partner’s rights, courts may order its return or compensation, unless the recipient acted in good faith for adequate consideration.
• Section 44C (PRA) – If relationship property is transferred to a trust during the relationship, defeating a partner’s rights (without intent), courts may order compensation from relationship/separate property or trust income.
• Section 182 (FPA) – Courts may vary nuptial trusts upon marriage/civil union dissolution to address benefit disparities.
• Constructive trust – Arises if a partner contributes to trust property with a reasonable expectation of benefit, requiring compensation.

Prenuptial/Postnuptial Agreements

Section 21 of the PRA allows for couples to “contract out” of the default equal sharing provisions. There are some formal requirements, including:

• agreement must be in writing, signed and witnessed by lawyers;
• both parties must receive independent legal advice; and
• terms of the agreement must be fair and reasonable.

Courts may set aside agreements where the circumstances could amount to causing “serious injustice” (Section 21J, PRA) considering the overall fairness of the agreement, the amount of time that has elapsed, and any other circumstances that may apply.

Formal relationship property agreements that comply with the technical provisions of the PRA are essential for clarifying and confirming how assets should be owned, in the event of a marriage or relationship breakdown.

Transfers of property during life or after death (via a will) generally set the cost basis at market value for recipients, with no immediate tax being payable on receipt. However, a potential future liability could arise on sale (eg, bright-line test).

Specialist tax advice should be sought prior to transferring assets to trusts, especially depreciable assets.

There are no death taxes/estate duties or gift taxes, so this is not applicable in New Zealand. Assets can pass tax free to the younger generation via wills, and no tax is payable on distributions of capital from trusts.

Digital assets are personal property and are treated as such under general property law.

There is currently no specific legislation that addresses digital asset administration. To ensure smooth management and transfer of assets after death, individuals should take care to:

• include reference to their digital assets in their will;
• provide account details, passwords or access instructions to their executor; and
• consider appointing an executor who is comfortable with technology.

In New Zealand, trusts and similar entities are widely used for tax and estate planning to protect assets, manage succession and optimise tax outcomes. The primary types include the following.

• “Discretionary” trusts – These are used to ring-fence personal assets from business risk and/or to facilitate succession and tax planning.
• Funeral trusts – Prepaid trusts (up to NZD10,000) to meet funeral expenses. Due to ownership of the funds being transferred during the lifetime of the settlor, this removes the funds from the settlor’s estate at time of death. Probate of those funds is therefore not necessary, and they can be immediately available for payment upon the death of the settlor.
• New Zealand foreign trusts – Established by non-residents with New Zealand trustees, these are tax-exempt on foreign-sourced income, ideal for international wealth planning.
• Limited partnerships – Tax-transparent entities often paired with trusts, these are used for offshore planning and recognised as separate legal entities abroad.
• Charitable trusts – Established for charitable purposes, these are popular due to their relative ease of establishment and the benefits of charitable registration (ie, status tax exemptions). Foundations are uncommon due to the lack of specific domestic legislation.

Recent Developments Affecting Benefits

Recent developments include the following.

• Trusts Act 2019 (effective January 2021) – This modernised trust law clarifies the duties owed by trustees to beneficiaries. The updated legislation better equips beneficiaries for holding trustees to account and empowers them to request information about the trust from the trustees.
• Trustee tax rate increase (April 2024) – The rate was raised from 33% to 39%, aligning with the top personal tax rate. The higher taxation encourages income to be distributed to lower-taxed beneficiaries (rather than retained, taxed at 39% and added to the trust corpus).
• Enhanced disclosure rules (2021–22) – Trusts must file detailed financial statements and beneficiary information (eg, settlor details, distributions).

The changes largely maintain the protection offered by trusts, but increase the administrative and compliance burden.

Trusts are recognised and respected in New Zealand as an established structure for estate planning and asset protection, governed by the Trusts Act 2019. They are commonly used for:

• succession planning purposes (particularly given the rise of second/third marriages and blended families); and
• safeguarding family assets from third-party creditors and business risk.

Unlike companies, trusts are not legal persons; they are fiduciary relationships where trustees legally own and manage assets for the benefit of the beneficiaries, in accordance with the terms of the trust deed. The separation of legal and beneficial ownership is a cornerstone of their protective function, and is recognised and understood by New Zealand courts and legislation.

The Supreme Court in Regal Castings Ltd v Lightbody [2008] NZSC 87 affirmed trusts’ ability to protect assets from creditors, provided:

• the trust is established for legitimate purposes (eg, asset protection or succession planning) without intent to defraud creditors; and
• the settlor was solvent at the time the assets were transferred into the trust.

In New Zealand, tax consequences for residents involved with trusts will depend on the trust’s status (complying, foreign or non-complying) under the Income Tax Act 2007.

As a fiduciary (trustee), the following tax consequences may apply.

• Foreign trust – No tax on foreign-sourced income if registered with Inland Revenue within 30 days and compliant with disclosure (Tax Administration Act 1994, Section 59C). New Zealand-sourced income is taxed at 39%.
• Risk – A settlor becoming a New Zealand resident makes the trust non-complying unless elected as complying within 12 months, taxing distributions at 45%.

The transitional residency exemption has the following effect. 

• New Zealand’s four-year transitional residency period allows a new resident settlor to maintain foreign trust status temporarily, delaying tax on worldwide income. Within 12 months of residency, the settlor can elect for the trust to become a complying trust to avoid non-complying status and 45% distribution tax.

As a beneficiary, the following tax consequences may apply.

• Income distributions are taxed at the beneficiary’s marginal rate (between 10.5% and 39%). Capital/corpus distributions are tax-free (no general capital gains tax). Non-complying trust distributions face 45% tax. Offshore investments over NZD50,000 may trigger Foreign Investment Fund (FIF) tax (5% imputed income).

In response to the above-mentioned tax consequences, below are some planning opportunities to consider.

• New Zealand foreign trusts can be an effective ownership vehicle for non-residents to hold offshore assets, tax-free.
• Trusts can be effectively paired with limited partnerships, improving offshore flexibility.
• In circumstances when a settlor wishes to become a New Zealand resident, the four-year transitional residency period can be used to avoid non-complying status, avoiding 45% tax.

Consider distributing income to lower-taxed beneficiaries (applying the beneficiary’s marginal tax rate rather than the flat trustee rate of 39%). However, this is subject to the minor beneficiary rule, which imposes the trustee tax rate on income distributed to beneficiaries under the age of 16 if it exceeds NZD1,000 per year from trusts settled by related parties.

New Zealand has enhanced irrevocable trusts to allow flexibility and settlor influence, while ensuring that the protection offered by a genuine and well-administered structure is not lost.

Historically, settlors could not benefit from trusts, prompting the use of mirror trusts. Reforms in the 1980s and the (now repealed) Trustee Act 1956 allowed settlor-beneficiaries. In Clayton v Clayton [2016] NZSC 29, the Supreme Court upheld a trust despite extensive settlor powers but treated them as a divisible “bundle of rights” in a relationship dispute, settled without appeal. This highlights the balancing act: settlors can retain powers, but excessive control risks claims and accusations of a “sham”.

The Trusts Act 2019 codifies the Saunders v Vautier principle (Section 122), enabling unanimous adult beneficiaries to vary or terminate trusts, and permits court-approved changes (Sections 123–125). Trust deeds can include powers to amend the terms of the trust deed, change the class of beneficiaries, and appoint/remove trustees.

Assigning some or all of these powers to those in fiduciary roles (ie, independent trustees, protectors, guided by a memorandum of wishes), can be effective in ensuring the trust remains adaptable whilst intentionally limiting the control the settlor holds over the structure.

Trusts are widely regarded as the most popular method for asset protection in New Zealand due to their versatility, robust legal framework and ability to shield assets from various risks. It is estimated that New Zealand has between 300,000 and 500,000 trusts, against a population of approximately five million.

Trusts are often regarded in New Zealand as the cornerstone of family business succession planning, with the “dual trust structure” being popular for holding business interests, safeguarding family assets and providing a clear mechanism for transferring wealth and control across generations.

A well-considered succession plan can optimise tax and minimise the potential for inter-family conflicts.

The dual trust structure typically takes the form of a “business trust”, which holds shares in a trading company or other business interests, sitting alongside a separate “family trust”, which holds personal assets and can benefit family members directly (especially when doing so from the business trust is not desirable).

For blended families, multiple family trusts can be formed and appointed as beneficiaries of the business trust, if deemed necessary or prudent, allowing for equitable distributions across the family and minimising the potential for disputes to arise.

Some advantages and considerations of the dual trust structure include the following.

• Tax efficiency – Company profits are taxed at 28%, lower than the 39% trustee rate, reducing business income tax.
• Flexible dividend distribution – The business trust can funnel company dividends via the family trust to its beneficiaries, where they can be taxed at the recipient beneficiary’s marginal rates (10.5%–39%, based on personal income), saving tax if that rate is below 39% (subject to the minor beneficiary rule: see 3.3 Tax Considerations: Fiduciary or Beneficiary Designation).
• Capital distributions – Capital distributions are tax-free.
• Planning across blended families – In the context of “blended families”, separate family trusts can be formed to cater to different “branches” of the family tree, with the ability for distributions to flow from the business trust, equally or disproportionately (if that is desired, to reflect differing levels of entitlement) to the family trust(s).
• Succession planning – The business trust ring-fences personal/family assets from business risk and third-party creditors. The structuring of the family trusts, combined with clear guidance from the settlor (in the form of a memorandum of wishes), ensures benefits ultimately filter through to the intended recipients.

If multiple shareholders are involved with the operating company and business, a shareholder agreement with buy/sell provisions and reciprocal life insurance policies can help ensure business continuity upon the settlor’s death, ensuring there is funding available to facilitate the surviving shareholder purchasing the deceased’s shares, and ultimately providing funding for the value of the business interests to the family trust.

A further layer of protection to the structure might involve a relationship property agreement (under Section 21 of the Property (Relationships) Act 1976), to safeguard the trusts and business interests from claims under relationship property legislation.

As there is no gift duty, estate duty or tax payable on capital distributions, no planning is therefore required to adjust values for the purposes of reflecting a lack of marketability or control.

In New Zealand, cases disputed in the highest court in relation to both trusts and estates have been much discussed amongst legal practitioners in relation to their implications and contribution to the development of the law of private wealth.

A recent notable case in the Supreme Court is the case of Cooper v Pinney [2024] NZSC 181. This case discussed the controversial case of Clayton v Clayton [2016] NZSC 29, where the same court viewed that Mr Clayton’s vast powers in his trust, including the ability to remove all other beneficiaries, were tantamount to ownership, and held that Mr Clayton’s powers were personal interest subject to relationship property division under the Property (Relationships) Act 1976. This line of argument failed for Ms Cooper in the Supreme Court in Cooper v Pinney because Mr Pinney’s powers in his trust were more restricted. This is an important development as the court has set a boundary to the application of Clayton v Clayton.

A recent notable estate and trust dispute is the case of A, B and C v D and E Limited as Trustees of the Z Trust [2024] NZSC 161. The adult children of the deceased challenged the transfer the deceased made into the trust prior to his death for the purpose of not leaving inheritance to his children. While the children succeeded in the High Court, they failed in the Court of Appeal: it ruled that, given the children are now adults, any fiduciary duties a parent had for their children would have ceased. The Supreme Court confirmed the Court of Appeal’s findings. If the assets were not in a trust, but under the father’s personal estate, the children may have a chance of a successful claim under the Family Protection Act 1955. The Supreme Court expressed that, without anti-avoidance provisions in legislation, the courts would not have the jurisdiction to revoke the transfer made into the trust.

The Trusts Act 2019 (which came into effect in 2021) made changes to how trust disputes are potentially heard and resolved. Section 145 of the Trusts Act 2019 gives the court discretion to compel trustees and beneficiaries to use alternative dispute resolution (ADR) to resolve matters. The court has exercised this power in a number of cases, whereby arbitration, mediation or other methods of disputes resolution have been used, with the benefit of resolving sometimes sensitive family matters in private.

Other common forms of trust disputes include challenges such as:

• whether trustees are complying with their duty of care;
• whether trustees should be indemnified for various forms of costs and liabilities; and
• disputes leading to the removal of trustees.

In relation to estate disputes, common forms include challenges such as those concerning the following:

• the interpretation of wording in a will;
• the testamentary capacity of the deceased when the last will was made, in order to invalidate the last will; or
• testamentary promises made to a party not named in the will.

In relation to wealth disputes involving trusts or estates that go through the New Zealand’s court system, compensation for the aggrieved parties may come in various forms.

In trust disputes – for example if a trustee is challenged for breach of its duties, and should such breach cause loss to the trust property or interest to beneficiaries which is not covered by the trustee’s indemnities – the trustee may be ordered to restore such losses from their own pocket back to the trust fund.

In cases where property has been disposed to a trust to avoid obligations to third parties in circumstances such as those outlined in the Property Law Act 2007 or Property (Relationship) Act 1976, the court has the discretion to make orders to “claw back” this property to the transferor, and any obligations the transferor tried to avoid would apply accordingly; the aggrieved party would be entitled to such share of the property as they would have been had the property not been disposed to the trust. The court may order compensation to the aggrieved party whose claim or right was defeated by the disposition, such as a lump sum of money or a regular payment of income from the trust property.

In cases where the court considers that it would be unconscionable for an individual to be denied beneficial interest attached to a property held by another party, the court may find that the legal owner in fact is holding such property on constructive trust for the individual being denied beneficial interest. The court may give effect by order to transfer or pay a proportionate amount for compensation.

When property is transferred to a “trust” that is invalid, the invalidity may lead to a finding of resulting trust, where the transferee holds such property for the transferor as beneficial owner. A resulting trust may also be found when the payer pays to the recipient a sum of money to contribute to a purchase of property but such payment bears no characteristics of being a gift: the recipient of the payment will then hold a proportion of the purchased property on resulting trust for the payer.

For estate disputes, such as challenging the interpretation of a will, the court may order variation of the will in order to clarify, and order the administrator to give effect to the varied will. In some situations, the court may adjust the division of the property in dispute to reflect what the court thinks fit. In the event a trustee or administrator is found to not be adhering to their duties, the court may order specific performance and demand that a specific obligation be fulfilled. The court generally has wide discretion to award compensation, and may take into consideration the parties’ conduct in the matter and the reasonableness of the parties, when determining the amount of compensation or the terms to be attached to the court order.

Corporate fiduciaries, such as trustee companies established by law firms or accounting practices, are widely used as trustees. The involvement of professionals is often sought due to their expertise, impartiality and ability to manage high-value or blended family trusts effectively.

Settlors often engage corporate fiduciaries in order to ensure proper administration and compliance obligations are adhered to, and to minimise conflict in the family, through the involvement of impartial voices.

The default duties contained in the Trusts Act 2019, in particular the general duty of care and duty to invest prudently, impose a higher standard of conduct on corporate and professional fiduciaries (eg, lawyers, accountants), although these duties could be modified in the terms of the trust deed.

• Section 29 provides that trustees must exercise reasonable care and skill in trust administration, having regard to their special knowledge or experience.
• Section 30 requires trustees to invest trust property with the care and skill of a prudent business person.

The elevated duties imposed on professionals reflects their remuneration and expertise compared to lay trustees.

The concept of “piercing the veil” does not apply to trusts, as they are not legal entities with separate personality. Instead, trustees are personally liable for trust debts, including tax liabilities, which can be exacerbated by breaches of fiduciary or statutory duties under the Trusts Act 2019.

Trustees are liable for all trust debts. Tax debts are particularly enforceable against trustees, even corporate trustees.

However, trustees can seek reimbursement from trust assets for properly incurred liabilities; but this right to indemnity is lost if expenses are not reasonable or have arisen due to breaches in fiduciary/statutory duties.

Breaches (eg, mismanaging funds or failing to file taxes) can lead to personal liability for tax debts, penalties and beneficiary claims, with no indemnity if improperly incurred.

The Trusts Act 2019 sets out a default duty under Section 30 for trustees to invest prudently, requiring the care and skill of a prudent business person managing the affairs of others. Professional trustees, with specialised expertise, are held to a higher standard. Unlike mandatory duties – such as acting for the benefit of the beneficiaries (Section 26) or exercising powers properly (Section 27) – this duty can be modified by the trust deed.

Section 59 of the Trusts Act guides trustees to consider factors like diversification, risk, capital growth, income return and the trust’s objectives, in order to balance risk and reward. If a breach occurs, Section 128 ensures courts review the trustee’s investment strategy holistically, protecting strategic decisions made in good faith.

The duty to invest prudently interplays with others, including the following.

• Section 35 (default duty of impartiality) ensures trustees balance income and capital beneficiaries’ interests, promoting equitable investment choices.
• Section 29 (default duty of care) requires reasonable skill, encouraging non-professionals to seek expert advice when needed.
• Section 32 (default duty to consider powers) demands active review of investment options, ensuring proactive management.

The interweaving duties and obligations create a framework for trustees to adopt a strategic, diversified approach towards investment that prioritises the financial interests of beneficiaries.

New Zealand’s prudent person regime requires trustees to invest with the care and skill of a prudent business person managing others’ affairs, factoring in their expertise or professional standards.

The prudent person regime integrates Modern Portfolio Theory (MPT)’s focus on diversified portfolios to balance risk and return. However, unlike MPT, which optimises returns for a given risk, the regime prohibits speculative investments and focuses on prudent processes.

Diversification is expected unless exempted by the trust deed, with failure to do so risking personal liability (Section 128 of the Trusts Act 2019).

Trusts can hold active businesses (eg, controlling shares) if permitted by the trust deed. However, the following apply.

• Trustees must actively oversee businesses, seeking information (eg, board reports) and intervening if needed.
• Inclusion of anti-Bartlett clauses in the trust deed may limit monitoring duties.
• Trustees must consider and balance the interests of any income beneficiaries against beneficiaries entitled to receive capital – catering to one class may be detrimental to the other.
• Failure to properly monitor or fulfil obligations risks incurring personal liability of the trustees.
• Responsibility for management can be delegated (Section 67), but oversight from the trustee is still required (Section 68).

In New Zealand, domicile refers to a person’s permanent home where they intend to reside indefinitely.

Tax residency in New Zealand is established if an individual spends more than 183 days in New Zealand within a 12-month period or has a permanent place of abode in the country.

New Zealand residency is granted through a residence visa: various visa categories lead to the grant of a residence visa. Once an individual holds a residence visa for 24 months and meets other requirements, that individual will be able to apply for a permanent residence visa, which allows indefinite stay and does not require the individual to establish or maintain fiscal residency in order to retain it.

New Zealand citizenship can be acquired by birth (subject to parental status) or by grant after meeting residency, character and language requirements. New Zealand allows dual citizenship.

New Zealand does not have a formally recognised expeditious or fast-track pathway to citizenship for most individuals. Citizenship is generally obtained through grant, with the requirement of a standard five-year residence period and compliance with all statutory criteria. However, there are limited exceptions where citizenship may be granted more quickly at the discretion of the Minister of Internal Affairs, but these are rare and exceptional.

New Zealand provides flexible trust law and statutory mechanisms to support minors and adults with disabilities. Discretionary trusts, with clear guidance expressed to the trustee, can be applied towards looking after a minor or for adults with disabilities.

One may also use wills to set up testamentary trusts to appoint a trustee to manage the inheritance of a minor until they reach the age of majority or a disabled adult.

Where an adult becomes incapacitated, an applicant may apply under the Protection of Personal and Property Rights Act 1988 for the court to appoint a property manager and welfare guardians. Enduring power of attorney for property or personal care and welfare can ensure long-term care and financial protection for individuals who become incapacitated.

The New Zealand government provides a range of financial support for minors and adults with disabilities, aiming to enhance their quality of life and facilitate community participation. In relation to minors under the age of 18, the Child Disability Allowance offers non-means-tested financial assistance to caregivers of children who require constant care due to a serious disability.

For adults, the Disability Allowance is a payment scheme from the government to help cover ongoing costs associated with their condition, such as medical expenses, travel and special equipment. In addition, the Supported Living Payment is another scheme which provides income support to individuals who are unable to work on a long-term basis due to a significant health condition or disability.

In New Zealand, in the event a parent dies leaving a minor without a surviving legal guardian, the Family Court has jurisdiction to appoint a guardian of the minor under the Care of Children Act 2004.

In the event an adult loses mental capacity, the appointment of a welfare guardian or conservator (property manager) requires a court application under the Protection of Personal and Property Rights Act 1988, and the appointee is subject to ongoing court supervision and obligations to submit annual statements. These safeguards are designed to protect vulnerable individuals and ensure decisions made on their behalf are in their best interest.

New Zealand supports its citizens and residents in preparing financially for longer lifespans through a combination of public and private initiatives. These include the KiwiSaver scheme, which is a voluntary long-term retirement savings plan with employer and government contributions.

The New Zealand Superannuation is a universal public pension for eligible residents in New Zealand. The current age of eligibility for New Zealand Superannuation is 65 and over.

There is a range of legal and estate planning tools to assist with individuals who may live longer but have lost mental capacity due to old age. While they still have capacity, they have the option to plan for the contingency of losing capacity by setting up enduring powers of attorney for both property and personal care and welfare.

Public financial education, led by organisations like the Retirement Commission and Sorted, also plays a vital role in promoting financial literacy and long-term planning.

In light of the longer average life span, the trust law in New Zealand has also been adjusted: the latest Trusts Act 2019 repealed the Perpetuities Act 1964, which confined the perpetuity period to 80 years. The Trusts Act 2019 currently imposes a maximum trust period of 125 years.

New Zealand’s Status of Children Act 1969 ensures equal treatment for all children, eliminating distinctions like “illegitimacy”.

• Children born out of wedlock – treated equally to children born within marriage for all legal purposes, including inheritance.
• Adopted children – deemed legal children of the adoptive parents, aside for Māori customary adoptions (known as whāngai).
• Surrogate children – the surrogate mother and her consenting partner (if any) are the legal parents at time of birth. The intended parents must adopt the child to gain legal parenthood.
• Posthumously conceived children – recognised as legal children of the deceased parent, if conceived via assisted reproduction with consent. However, the right to inheritance would depend on the timing of the birth/death, and the terms of the deceased’s will. If a child is born after the death of their parent, they would not typically be entitled to inheritance.

Where a parent has not provided for their child, living at their death, in their will (eg, a biological child born out of wedlock), that child may be able to bring a claim for further provision, against the deceased parent’s estate, under the Family Protection Act 1955 (see 2.3 Forced Heirship Laws).

With respect to trusts, the terms of the trust deed, including its beneficiaries, can be drafted to include specific children. There is no obligation for a settlor to include all their children as beneficiaries of a trust.

Same-sex marriage has been legal in New Zealand since August 2013. Previously, “civil unions” were more widely used.

New Zealand promotes charitable giving through tax incentives under the Income Tax Act 2007, which is based around “donee status” for approved charities or entities (eg, registered charities, schools).

Donations to a charitable entity with donee status allows donors to receive a 33.33% tax credit for cash donations of NZD5 or more. Likewise, charitable bequests in a will are income tax exempt, and can reduce estate tax liability. Companies and Māori authorities may deduct donations to donee organisations from their taxable income.

Registered charities are exempt from income tax and resident withholding tax on non-business income. Combined with donee status, the framework encourages charitable giving.

New Zealand’s charitable planning primarily utilisescharitable trusts, incorporated societies and charitable companies, which must register under the Charities Act 2005 to gain donee status and tax benefits. In order to qualify as a charity, the structure must align with one of the four charitable purposes:

• relief of poverty;
• advancement of education;
• religion; or
• community benefit.

Charitable trusts, governed by the Trusts Act 2019, are popular for their simplicity and flexibility. Customisable trust deeds can support goals like education or welfare, with amendment powers (used cautiously to preserve charitable purposes). Registered trusts are exempt from income tax and resident withholding tax on non-business and enable 33.33% donor tax credits. However, trustees face personal liability for breaches, and the Charities Act 2005 compliance can be rigorous. Scalability is limited by reliance on donations, small trustee groups and restricted commercial activities, which must directly serve charitable goals.

Incorporated societies, distinct entities under the Incorporated Societies Act 2022, may register as charities if pursuing charitable purposes. They offer limited liability, democratic governance suited for community initiatives, and tax exemptions if registered. However, complex rules, mandatory meetings and membership management demand time and resources. If the society participates in non-charitable activities, it risks deregistration.

Charitable companies, formed under the Companies Act 1993 and registered as charities, suit larger operations. They provide limited liability, commercial flexibility to fund charitable purposes, and tax exemptions. However, dual compliance with the Companies Act 1993 (Section 131) and Charities Act 2005 increases costs. Commercial activities may attract scrutiny, deterring donors, and winding up can be complex due to the requirement to transfer assets to a charity with similar purposes.