Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Government to consult on trust-tax law changes

23 June 2000 Media Statement

Government to consult on trust-tax law changes

The Government is seeking public input on the details of implementing its proposal to tax distributions of trust beneficiary income to minors at the rate of 33 percent.

An issues paper seeking submissions on aspects of the proposal has been placed on two government web sites for the purpose, Revenue Minister Michael Cullen said today.

"Trust beneficiary income that is claimed to be income of children is, in substance, often not theirs," Dr Cullen said. "For example, in the 1998 income year about 3,500 children under the age of six received a total of more than $27 million in beneficiary income from things like business activities. This figure excludes interest and dividend income distributed by trusts. It is absurd to argue that an average of $7,700 in income attributed to these very young children should qualify for tax rates meant to apply to people on low incomes."

"I announced in the Budget speech that the Government will introduce legislation to tax trust distributions to minors at 33 percent, rather than at the minor's marginal tax rate, which can be 19.5 percent. The purpose of this legislation is to limit the tax benefits of using a trust as a device for splitting income with minors."

"I also announced that we were considering allowing limited exclusions to this new rule. A possible exception, for example, would be court-ordered trusts."

"The issues paper seeks public submissions on how the Government's policy should best be implemented. In particular, it seeks views on suitable exceptions to the minor beneficiary rule, how the term 'minor' should be defined, and associated operational matters."

"The public has until 24 July to let us know their views. After submissions have been considered, we hope to include the proposal in a bill to be introduced in October. Once enacted, the measure will come into effect from 1 April next year."

"I therefore encourage all those who want to express their view on these matters to take advantage of the consultative process," Dr Cullen said.

The issues paper is on the web site of the Policy Advice Division of Inland Revenue at www.taxpolicy.ird.govt.nz and the web site of the Treasury at www.treasury.govt.nz.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Breed Laws Don’t Work: Vets On New National Dog Control Plan

It is pleasing therefore to see Louise Upston Associate Minister for Local Government calling for a comprehensive solution... However, relying on breed specific laws to manage dog aggression will not work. More>>


Corrections Corrected: Supreme Court Rules On Release Dates

Corrections has always followed the lawful rulings of the Court in its calculation of sentence release dates. On four previous occasions, the Court of Appeal had upheld Corrections’ practices in calculating pre-sentence detention. More>>


Not Waiting On Select Committee: Green Party Releases Medically-Assisted Dying Policy

“Adults with a terminal illness should have the right to choose a medically assisted death,” Green Party health spokesperson Kevin Hague said. “The Green Party does not support extending assisted dying to people who aren't terminally ill because we can’t be confident that this won't further marginalise the lives of people with disabilities." More>>


General Election Review: Changes To Electoral Act Introduced

More effective systems in polling places and earlier counting of advanced votes are on their way through proposed changes to our electoral laws, Justice Minister Amy Adams says. More>>

Gordon Campbell: On Our Posturing At The UN

In New York, Key basically took an old May 2 Washington Post article written by Barack Obama, recycled it back to the Americans, and still scored headlines here at home… We’ve had a double serving of this kind of comfort food. More>>


Treaty Settlements: Bills Delayed As NZ First Pulls Support

Ngāruahine, Te Atiawa and Taranaki are reeling today as they learnt that the third and final readings of each Iwi’s Historical Treaty Settlement Bills scheduled for this Friday, have been put in jeopardy by the actions of NZ First. More>>


Gordon Campbell: On The Damage De-Regulation Is Doing To Fisheries And Education, Plus Kate Tempest

Our faith in the benign workings of the market – and of the light-handed regulation that goes with it – has had a body count. Back in 1992, the free market friendly Health Safety and Employment Act gutted the labour inspectorate and turned forestry, mining and other workplace sites into death traps, long before the Pike River disaster. More>>

Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news