It is increasingly common to have family living temporarily or permanently overseas and sometimes splitting their time between New Zealand and other countries. When this is the case, we encourage our clients to get in touch if you have a Trust. This is especially important for the Trust Settlors, trustees, beneficiaries and the persons who is able to appoint trustees and beneficiaries. We do recommend that your trustees and the persons who hold the power to appoint trustees live in New Zealand. It is equally important that we know where you as the Settlors are living too.
There has been increasing red-tape which can catch people out. An example of a recent issue has been when a beneficiary or trustee is thinking of moving over to Australia:
For example: You decide to send to your son Tom in Sydney some money to help out. This is from your Trust, and your son Tom is a beneficiary of your Trust. Tom may likely need to add this amount into his Australian tax return and he may end up keeping less than you want him to have as he may have to pay some tax, as this would not just be a family gift but be called a distribution from a foreign trust.
Or you may decide instead to make a loan to Tom from your Trust, but again Tom may likely need to add this amount into his Australian tax return and he may end up keeping less than you want him to have, as he may have to pay some tax if this comes from a foreign trust.
How this effects your Trust and how you might be able to assist your loved beneficiary in the future can depend on how decisions are made. Timing is important in life and the earlier the discussion, the easier it can be.
At Lucas and Lucas, we can discuss with you how best to help. Give us a call 03 477 8080.