Inheritance tax in disguise prompts trustees

Inheritance tax in disguise prompts trustees

Nation-wide advertising begins this week in a campaign to block Government plans for "an inheritance tax in disguise".

Advertisements have been scheduled in major newspapers by the New Zealand Trustees Association seeking support from trustees, beneficiaries, and professional advisers for the association's drive to oppose an increase in the family trust tax rate.

The Trustees Association represents registered and professional trustees, administrators, trust companies and professional advisors.

Association Executive Officer Errol Anderson said the Inland Revenue Department planned to raise family trust tax to 36% while lowering the company rate to 30%.

"This is an inheritance tax in disguise which will hit families hard," he said.

"It is unacceptable for the rich, along with companies, to get a tax break at the expense of family trusts.

"More than 244,000 trusts are registered with the IRD. Most of them are family trusts where the minor beneficiaries ‹ children ‹ are already paying a corporate tax rate of 33%.

"Under this proposal, those children will pay more tax than companies and large corporate bodies."

Mr Anderson said the association had created a new membership classification for family trustees and had launched a campaign "fighting fund". An on-line registration process for new members had been set up on the association website (www.nzta.org.nz).

In advertisements due to run this week, the association says trustees have a duty to take action to protect the income and capital of their trust.

It urges trustees and beneficiaries to join the association and contribute to the fighting fund to force an Inland Revenue and Treasury rethink.

The association has made a submission to the Commissioner of Revenue opposing proposals to increase the trust tax rate.

ENDS