There are three types of trust for New Zealand income tax purposes:

1.  Complying trust (formerly qualifying trust) - one which has been taxed in New Zealand on ALL (worldwide) trustee income since the date it began. These include trusts settled by New Zealand residents with New Zealand trustees, estates of people who were New Zealand residents when they died and other trusts which have elected to become complying trusts. A trust remains a complying trust if, since settlement of the trust, the trustees have satisfied all obligations in respect of its income tax liabilities.
2.  Non-complying trust (formerly non-qualifying trust) - If a trust ceases to meet the conditions for a complying trust in an income year, it will no longer be a complying trust - it will generally become a non-complying (formerly non-qualifying trust). For example, if the tax on a complying trust's trustee income is not paid, or if the trustees cease to be New Zealand residents. A non-complying trust is any trust that is neither a complying trust nor a foreign trust at the time it makes a distribution. It is generally a trust that has a resident settlor, has been established overseas with non-resident trustees, and has not been liable for New Zealand income tax since it was first settled. It also includes a trust where its trustee income has been liable to full New Zealand tax but the trustees have not paid the tax.
3.  Foreign trust - Foreign trusts are trusts that are established in New Zealand but no settlor (the person who settles assets on the trust) is resident in New Zealand at any time. A foreign trust may have one or more trustees resident in New Zealand.

This article only deals with Foreign Trusts.

A trust exists when one person (a "trustee") holds and owns property for the benefit of another person (a "beneficiary"). A family trust is a trust set up to benefit members of your family.

 The purpose of the family trust is to hold (through you transferring your assets), so that legally you own no assets yourself, and through the trust, still have some control over, and get the benefit of, these assets.

 You can set up a family trust either while you are still alive (by a declaration of trust contained in a trust deed) or when you die (by the terms of your will). This article is mainly concerned with trusts created while you are alive, and with the benefits that these trusts can provide for you in your lifetime.
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 The family trust can be setup either as a "Fixed" trust (with named / specified beneficiaries with fixed ratio / amount of benefits) or a "Discretionary" trust (with "described" beneficiaries with benefits that are at the "discretion" of trustees). This is discussed in a bit more detail in the beneficiaries section below.

​More and more companies are being re-organised by value chain (how the business adds value to its customers and stakeholders) rather than functionally (Products, production, finance, HR etc). Unfortunately management accounting has failed to keep pace in delivering value added proactive periodic financial reports!

This is particularly true in small to medium sized organisation (both for and not-for-profit sectors) where traditional accounting is used mostly as part of its compliance infrastructure. Among other disadvantages, this approach

1. forces the performance managers to be more like budget managers. Where there are indirect cost allocations, the performance managers will also have accountability over costs or their method of allocation are not in their control; and
2. is excellent in masking wastage!

 
Incorporating the portfolio approach to management reporting insures that

1. products and services stand on their own by making transparent, the resources consumed in generating margins by product / service and value for customers; 
2. there is ONE individual or team responsible for eliminating "wastage" by either transferring it out of the business or ensuring that its starts to add value to its customers and finally, but most importantly,
3. On an ongoing basis, the business managers will need to establish a direct relationship between one-off costs and value added BEFORE these are incurred!

​Although the concepts, in different incarnations, are applicable to both new and existing businesses, it is particularly beneficial to those at the cusp of a growth spurt.

In October 2015, the National Government introduced the Bright Line Test on land transactions. This was an attempt to slow down the runaway property market by imposing extra "costs" on land transactions that fall within the ambit of the Bright Line Test!

The government didn't really have a choice - the dreaded Capital Gains Tax is political suicide and the runaway property prices was hurting the government's chance for re-election (oh yes! & the public). So, quite brilliantly, they applied what is common in some European countries.

It is obviously working as CoreLogic data shows that 7% of the Auckland sales in 2016 were properties that were sold within a year compared to 11.7% at the peak of the last boob during mid-2000.