Data extracted on 24 November 2022. All data is subject to further updates.
Alignment of the trustee tax rate with the top personal tax rate from 2011/12 means that there was no longer a tax rate advantage in passing dividends through trusts, although existing structures will remain.
From 2020/21 onwards however, the top personal tax rate is again higher than the trustee tax rate.
Trust: A trust is an entity that holds money or property for the benefit of its beneficiaries or for law purposes.
Beneficiary income vs trustee income: Beneficiary income is income of a trust that vests in a beneficiary during the year or is paid to a beneficiary during the year or within a certain period after the end of the year. The rest of the income generated by a trust will be trustee income.
IR6 form: If you are a trustee of a trust, or the executor or administrator of a deceased person's estate you need to file an IR6 to account for income the estate or trust earns.
The monetary amounts are only for those trusts that allocated beneficiary or trustee income.
Limitations of the data
Data extracted in November 2022. All data is subject to further updates, but the data for 2019 in particular is incomplete. The amounts are only for those trusts that allocated beneficiary or trustee income.
Changes to data collection/processing
Much of the growth of trustee income between 2001 and 2010 was in the form of imputed dividends. The 2010/11 (labelled 2011 on the graph) drop in trustee income corresponds to a decline in dividend payments. New Zealand's imputation system allows company tax credits to be attached to dividends when they are paid out to shareholders, giving the shareholder a credit for company tax already paid. The company tax rate dropped from 33c to 30c in the 2008/09 year, and from 30c to 28c in the 2011/12 year. In both cases, companies could attach imputation credits to dividends with reference to the higher preceding company tax rates for an additional two years. For this reason, part of the drop in 2010/11 and in 2013/14 trustee income will have been due to firms making adjustments after having high dividend pay-outs in the preceding year. Alignment of the trustee tax rate with the top personal tax rate from 2011/12 means that there is no longer a tax rate advantage in passing dividends through trusts, although existing structures will remain.
On 1 April 2021, the personal income tax scale changed with the introduction of a higher rate of 39c for income over $180,000. The growth in trustee income in the 2021 tax year arises from companies paying out retained earnings as imputed dividends to their shareholders, including trusts, prior to the introduction of the 39c top personal tax rat