Home > Updates > Trust tax rate increases to 39%
From the 2024/25 income year (1 April 2024 for most trusts), the tax rate applying to trustee income has increased from 33% to 39% to align with the top personal tax rate.
There are only a few concessions to the rate change:
Given the tax rate increase, trustees have been concerned that some ordinary actions taken by trustees may be considered to be tax avoidance. Inland Revenue has now released guidance confirming that the following actions are unlikely to be regarded as tax avoidance, so long as there are no artificial or contrived features:
Inland Revenue have, however, noted that questions may be asked if:
If you would like to discuss how the trust tax rate increase will impact your trust, please contact your Nexia advisor.
If you are not already a Nexia client and you are looking for specialist tax advice or strategies for effective tax planning, contact us to explore how we can help. Nexia is one of New Zealand’s best accounting and business advisory firms with offices in Christchurch, Albany and Newmarket in Auckland, and Hastings in the Hawke’s Bay.