The Benefits of the NZ Trust – New Zealand Family Trusts Explained
March 17th, 2010 Filed under: ab trust,Executor Fees,sample wills,Trusts attorney — Estate Planning Author
Without you probably knowing it, the Trust regime in New Zealand is one of the best in the world. This article will provide explanation on the benefits of the NZ Trust, a kind of family trust that you can fully control while enjoying the tax benefits and excellent asset protection.
One of the benefits of the New Zealand Trust is its excellent asset protection. Because the Trust property is quarantined from matrimonial claims, it is one vehicle to protect you from future financial disputes, particularly with divorce. This asset protection feature is also excellent to shield you from potential financial problems as the Trust is also quarantined from creditors.
The NZ Trust’s tax profile is also worth mentioning as a benefit. Unlike many developed countries, including the neighboring Australia, New Zealand does not penalize income being in Trust. As of the moment, the top marginal tax rate is 38% on over NZ$75,000 income. On the other hand, the Trust tax rate is only 33% on retained income.
Another benefit of the Trust is the income split with marginal tax rates. The trustees of the NZ Trusts can allocate income to beneficiaries like you, your spouse, and your children. This scheme enjoys marginal rates, which can be lower than the Trust rate depending on the income tier. The marginal rates in New Zealand range from 0 to 38% based on annual income allocation.
To conclude, the NZ Trust is one of the most optimized, if not the best, method to enjoy tax benefits while protecting your wealth. In a Trust, you have the benefit of full control over your assets while protecting yourself from future financial troubles. This advantage of full asset protection from matrimonial claims and creditors is peace of mind in itself. Thus, you need to set one up as soon as you can.
