Over recent years, New Zealand has attracted increasingly favourable attention as a situs for trusts settled by international families for estate-planning and wealth preservation purposes - primarily as result of the highly convenient platform afforded by its Foreign Trust regime. With its trusts legislation combined in statute and case law, a trust is a Foreign Trust when (as determined by the NZ Inland Revenue Department) none of its settlors are resident in New Zealand at the time the trust is settled - but it ceases to be a Foreign Trust if any distribution is made from it after a settlor becomes a New Zealand resident or if a New Zealand-resident settlor subsequently settles assets on the trust.

Amongst the advantages of a New Zealand Foreign Trust are:-

  • OECD member and FATF white-listed status of New Zealand as the trust situs.
  • Exemption from New Zealand taxation on all foreign source income and capital gains.
  • Non New Zealand resident beneficiaries are taxable only on New Zealand source income.
  • Flexibility of administration and confidentiality (due to limited disclosure of information).
  • Planning opportunities afforded by New Zealand’s network of double tax agreements.

The trustee of such a Foreign Trust would be Chartered Trust (NZ) with the trust administration being conducted between New Zealand and the Turks & Caicos Islands as most efficiently suits the circumstances of the particular trust and its beneficiaries.