This week the Finance Minister Bill English and Revenue Minister Michael Woodhouse announced that the Government will be making some changes to the foreign trust disclosure rules.
In April, as a result of the Panama Papers being released, Cabinet agreed to appoint highly regarded tax expert John Shewan to conduct an independent review of the disclosure rules covering foreign trusts registered in New Zealand.
The Shewan Report (released 27 June) noted that foreign trusts are legitimate vehicles and NZ’s tax treatment of foreign trusts was appropriate. However it identified a number of recommendations which propose improvements to registration and disclosure information, anti-money laundering rules and increased information sharing between government agencies.
The Government have accepted all of the recommendations with some minor variations, and is intending to move quickly on implementing them, with many to be introduced into a Tax bill in August this year.
Some key changes include introducing a register that is searchable by Internal Affairs and the Police, increasing the information required on the current disclosures, requiring registration when the trust is first formed and a requirement to file annual financial statements. Foreign Trusts will also need to pay a registration fee of $270 and an annual filing fee of $50.
The Shewan Report confirmed that the existing foreign trust disclosure rules were inadequate, and the government will be hoping their acceptance and quick implementation of the recommendations will go some way to fixing NZ’s damaged reputation caused by the Panama Papers.