Flat 33% Tax on Children hits Ordinary New Zealand
Flat 33% Tax on Children hits Ordinary New
It's Another tax increase
For Immediate Release
Wednesday, June 28, 2000
Michael Cullen's proposal to put a flat, final 33% tax on the beneficiary income of children shows that he doesn't understand the importance of trusts to ordinary New Zealanders, according to National MP Annabel Young.
"Ordinary New Zealanders use trusts in their wills. Trusts arise from many matrimonial property settlements. Most professionals put their assets into a family trust so that they are protected if there is a claim against their professional partners. Many Kiwi farms are held in trust as a way of managing the inter-generational transfer of very valuable assets," says Annabel Young. "Children are the beneficiaries of many of these trusts."
"The effect of this flat final 33% tax on children's beneficiary income will be to suck money out of ordinary NZ homes, especially in the provinces and the country."
"There are a million reasons why a child might be receiving income from a trust, and none of them is to do with tax. Settlors of trusts are showing that they want a beneficiary to have benefits without having control. This is often the case when a child inherits or is given money."
Annabel Young MP National Party Spokesperson for Revenue Visit the Tax Think Tank at http://www.tax.org.nz