Without you recognizing it, the Trust regime in New Zealand is perhaps one of the best in the whole world. This article will have an overview on the benefits of the New Zealand family Trust, the type of family trust, which you can completely control while taking advantage the tax advantages and outstanding protection of your assets.
One of the noteworthy advantages of the NZ Trust is the excellent asset protection. Since the Trust holding is immune from matrimonial demands, it is one prime structure to protect you and your family from future financial conflicts, especially with divorce. This benefit is also excellent to shelter you from potential financial problems as the Trust is likewise immune from creditors.
The New Zealand Trust’s tax profile is also a noteworthy advantage. Different from numerous industrialized countries, like Australia, New Zealand does not impose penalty income in a family Trust. As of this time, the top marginal tax rate is 38% on over NZ$75,000 income. But then, the tax rate for Trust is just 33% on maintained income.
Another advantage of the Trust is the income split with minimal tax rates. The trustees of the NZ Trusts can arrange steady income to beneficiaries like your spouse and children. This scheme has marginal tax rates that can be smaller than the usual Trust rate depending on the amount of income. The minimum rates in New Zealand are from 0% to 38% depending on yearly income.
In conclusion, the NZ family Trust is one of the best, if not the most advisable, method to enjoy tax benefits and at the same time sheltering your wealth. In a Trust, you have the benefit of full control over your Trust’s holdings while protecting yourself against prospective financial difficulties. This feature of asset protection from marital demands and creditors is your peace of mind in itself. Thus, you must set up your Trust as soon as possible.
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John Rowe is working with Gilligan Rowe & Associates. They are Chartered Accountants and are Specialist Accountants and Experts in property and family trusts.