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Changes to domestic trusts
The IRD has introduced changes to the annual reporting requirement for domestic trusts for the 2022 income tax year onwards. The reasons for the changes are to better understand and monitor the use of Trusts and their financial position. So, what does this mean for you? If you have an active trust that earns assessable income, the IRD will be requiring additional information in your 2022 return. The information that you will need to disclose:
- Earnings and financial position (assets, liabilities and equity).
- The details of the settlor of the trust.
- The amount and nature of any settlement made during the year, and details of the person who made the settlement.
- The details of any beneficiary who has received a distribution during the year, the amount, and nature of the distribution and any movement in the beneficiary’s account.
- All IRD numbers of any settlors who have made a settlement, or beneficiaries who have received a distribution
There are some exceptions including trusts that are non-active, foreign, and charitable. Please contact us for a full list of excepted trusts.
These changes will be captured in the online returns so prompts will be provided when the returns are done. If you are already on our tax agency, we will take care of all disclosures on your behalf. If you are not and would like some help – please contact me to discuss.