Govt should stop treating businesses w suspicion
6 September 2006
Government should stop treating business owners with suspicion.
Integrity Trust Limited has come out in support of the voluntary trustees fighting fund suggested by the Trustees Association.
“Rallying trustees around proposed tax increases is a great first step in unifying a largely segmented and silent group” says Mark Maxwell, Chief Executive for Trust Management Specialists - Integrity Trust Limited.
The Government is clearly targeting business owners who are legitimately utilising the wealth protection options available to them. Comments from Revenue Minister Peter Dunne suggesting “IRD had identified a “suspicious” spike in taxable income around the top end of the 33 percent personal tax bracket” supports this view.
Integrity Trust Ltd agrees with Errol Anderson, Associate Chief Executive of the Trustees Association that an attack on the trust tax rate will largely penalise those that are unable to defend themselves – the children who are beneficiaries.
There are also likely to be a number of elderly that will be disadvantaged by such an increase.
What the Government needs to realise is that those business owners they are targeting have the greatest number of options to avoid the impact of such increases; children and the elderly don’t.
“We welcome this opportunity to unite trustees and draw attention to one of a number of issues facing the industry” says Maxwell. While Integrity Trust Ltd supports the fighting fund itself, it should be seen as a first step to educating the thousands of relatively new trustees about the responsibilities and risks associated with their role.
It is an unfortunate fact that the vast majority of trusts in New Zealand are not being managed as they should, leaving them and the trustees responsible for them, open to risk. The consensus of most experts is that at least 75% of trusts are at risk of being challenged, Maxwell suggests the figure could be closer to 90%.
“Trustee education is vital to avoid thousands of trusts being successfully challenged over the coming years” says Maxwell. Trustees supporting the Trustees Association is an excellent first step.
Mark Maxwell is Chief Executive and Co-founder of Integrity Trust Limited (www.integritytrust.co.nz), a company specialising in trust management. Mark has extensive experience in the trust industry after a 17 year career with Public Trust where he held a number of senior roles, including General Manager of Charitable Services and National Manager, Trustee Services Development.