Accumulus Newsletter - December 2020                                                                                                                                                                                             

Tax Management NZ

Tax Management NZ is an IRD approved tax pooling intermediary. If you are unable to pay your income tax on time (or if you underpaid) you can purchase it from other taxpayers through Tax Management NZ. This is at a lower cost than the Interest and penalties issued by the IRD.

If you pay your provisional tax late (even a day) the IRD will take you out of safe harbour. Being out of safe harbour can result in interest if your income has increased, this includes backdating interest to previous provisional tax dates!

If this service will be useful to you please email/phone Accumulus.



The Trusts Act 2019 comes into force on 21 January 2021.

The Purpose of the Act is described as making the law of trusts more accessible by setting out the core legal principles, providing default administrative rules and resolution processes for disputes.

It documents expected standards and compliance requirements and consequently increases the risk of and grounds for challenges by disgruntled beneficiaries.

However for most genuine family trusts it is just formalizing the practices that should have been in place anyway and should not be a source of fear.


The rule against perpetuities is abolished and the maximum life of a trust is increased from 80 to 125 years.

The age of majority for trust purposes has been reduced from 20 to 18 years old. At majority any balance owing to a beneficiary can be demanded by the beneficiary.

Information to Beneficiaries

This is the issue which seems to have caused the most excitement and is set out in the Act clause 51 (3).

"There is a presumption that a trustee must make available to every beneficiary…… trust information".

This information includes advising:

a)    beneficiaries that they are beneficiaries,

b)    the names and contact details of the trustees,

c)    any changes in trustees as they occur,

d)    the right to request the terms of the trust and other trust information.

Following this in clause 53 there is a list of possible reasons which might apply allowing the trustees not to advise the beneficiaries as above or having done so to refuse requests for other "trust information".

It is likely in our view that for most Mum and Dad family trusts that their children who are almost certainly the ultimate beneficiaries will be aware of the trust.

Ideally parents would as a matter of course be explaining the nature of their circumstances and what to expect on their demise to their children (on or before they reach the age of majority). This should be happening whether or not there is a trust involved.

Usually if there is a situation of conflict or dispute it is because of an unexpected and perceived unfair treatment of one or more beneficiaries.

All trustees should be prepared to initiate this dissemination of information next year or alternatively document their rationale in the context of clause 53 for not doing so.

It is easy to find the Trusts Act 2019 through the internet and as legislation goes it is almost readable. Attached as an appendix to this newsletter is a copy of the clauses described above.

Should You Wind Up Your Trust?

Doing almost anything through a trust has already become an administrative hassle in particular because of the Anti Money Laundering "AML" bureaucracy that has been spawned over the last few years, so for some the Trusts Act 2019 may be the final straw in deciding to wind up a trust.

The following are factors in making this decision:

1.    Could you qualify for a rest care subsidy should you need one by retaining the trust,

2.    A trust is often called a living will. If all your assets are in a trust and you have left a memorandum of wishes there may be no need for a deceased estate which is simply a trust created on your death to deal with the assets in your will. (See 3. Also)

 3.    Are there beneficiaries that the trust is helping look after that will need to continue after the settlors deaths eg. a disabled child or a child with an alcohol or drug problem that needs support but cannot be trusted with the assets they are otherwise to receive.

 4.    Can you simplify your affairs and reduce costs by winding up your trust. - The administration of assets and investments in your own name(s) is generally much simpler. Cost savings might include eliminating independent trustee meetings and fees and reduced accounts preparation and tax filing costs.

 5.    Do you have scope for family tax savings by having a trust. - If a trust has income it can be distributed to be taxed in the hands of any of the beneficiaries at their marginal tax rates. Despite some anti avoidance provisions and the possible complication of creating balances owing to beneficiaries there can be considerable tax savings.

 6.    If a trust has losses or owns shares in a company that has losses or an imputation credit balance, there is the potential for losing the losses in the trust or the losses or imputation credits in the company if the shares change hands.

 7.    There is a cost to the winding up process particularly if there are many assets which need to be transferred and re-registered in individual names.

 8.    Does the trust provide any protection for family assets from creditors.

 9.    Is the formality, structure and the records that trusts require helpful in managing your family situation.

If you are considering the possibility please discuss this with us and your lawyer.                                                                                                             




                   No of MPs      % of MPs       % of Population


Women         58                48.3             51 approx      about right


Maori            21                17.5             17  approx     about right


Lawyers        21                17.5             0.3  approx    wildly over-represented

Cone movers  0                   0                growing         have no voice at all

NZ has come a long way from no women and a few Maori seats in parliament to the situation today where they are pretty much proportionately represented. Is this good?

Lawyers are hugely over-represented and road workers hugely under-represented. Is this bad?

Surely the important thing is not the representative proportionality in all or any respects but getting the best people to do the job for all of us.

Lawyers may not all be the best for us (and there might be some road workers that make damn good MPs) but on balance lawyers should have better training than the rest of us for law making and governance.

The relative dearth of accountant MPs (4) is a worry – a few beanies might not go amiss at the moment!



Urgent Matters

Parliament is presently dealing with several matters under urgency including:

-       The top personal tax rate is being increased to 39% for incomes over $180,000 for the tax year ended 31 March 2022.

-       Employees are to be given a further week of paid sick leave.

Also it is likely that a further public holiday will be introduced.

Whilst the introduction of a top personal tax rate is not likely to impact on many small business owners, the extra sick leave and holiday will most certainly affect all employers.

An employer will be paying 52 weeks wages for 84% attendance at work, ignoring the possibility of long service leave, bereavement leave, domestic violence leave and jury duty.

Employers are still responsible for putting aside holiday pay for their employees under rules that are extremely complicated. (Numbers of large companies and government departments have got it wrong over recent years.)

Although the rules are supposedly being simplified don't hold your breath.

Perhaps this suggests that there is one group that are disturbingly under-represented in parliament and that is businesses and in particular small business owners for whom the bureaucratic hurdles never seem to get any less.

Yet these are the only people that can hopefully, eventually wind back the public money creation / debt that is presently being incurred. Accumulus is on your side and happy to help if we can.





Accumulus officially closes for Christmas after work on Tuesday 22 December and re-opens on Monday 11 January.

We wish you all a great Christmas and many thanks for being clients of Accumulus.


Please get in touch if you have any questions in respect of the contents of this newsletter. 


From the Team at Accumulus


Extracts from the Trusts Act 2019

Clauses 51 to 53


51. Presumption that trustee must notify basic trust information

(1) There is a presumption that a trustee must make available to every beneficiary or representative of a beneficiary the basic trust information set out in subsection (3).

(2 )However,-

(a) before giving the information, the trustee must consider the factors set out in section 53; and

(b) if the trustee reasonably considers (after taking into account those factors) that the information should not be made available to every beneficiary,-

(i) the presumption does not apply; and

(ii) the trustee may decide to withhold some or all of the basic trust information from 1 or more particular beneficiaries or classes of beneficiaries.

(3) The basic trust information is-

(a)the fact that a person is a beneficiary of the trust; and

(b)the name and contact details of the trustee; and

(c)the occurrence of, and details of, each appointment, removal, and retirement of a trustee as it occurs; and

(d)the right of the beneficiary to request a copy of the terms of the trust or trust information.

(4) A trustee is required to consider at reasonable intervals whether the trustee should be making the basic trust information available under this section.


52. Presumption that trustee must give information on request

(1) There is a presumption that a trustee must within a reasonable period of time give a beneficiary or the representative of a beneficiary the trust information that person has requested.

(2) However,-

(a)before giving the information, the trustee must consider the factors set out in section 53; and

(b)if the trustee reasonably considers (after taking into account those factors) that the information should not be given to the person,-

(i)the presumption does not apply; and

(ii)the trustee may decide to refuse the request for trust information.


53. Procedure for deciding whether presumption applies The factors that the trustee must consider (for the purposes of sections 51(2)(a) and 52(2)(a)) are the following:

(a) the nature of the interests in the trust held by the beneficiary and the other beneficiaries of the trust, including the degree and extent of the beneficiary's interest in the trust and the likelihood of the beneficiary receiving trust property in the future:

(b) whether the information is subject to personal or commercial confidentiality:

(c) the expectations and intentions of the settlor at the time of the creation of the trust (if known) as to whether the beneficiaries as a whole and the beneficiary in particular would be given information:

(d) the age and circumstances of the beneficiary:

(e) the age and circumstances of the other beneficiaries of the trust:

(f) the effect on the beneficiary of giving the information:

(g) the effect on the trustees, other beneficiaries of the trust, and third parties of giving the information:

(h) in the case of a family trust, the effect of giving the information on-

(i) relationships within the family:

(ii) the relationship between the trustees and some or all of the beneficiaries to the detriment of the beneficiaries as a whole:

in a trust that has a large number of beneficiaries or unascertainable beneficiaries, the practicality of giving information to all beneficiaries or all members of a class of beneficiaries:

(j) the practicality of imposing restrictions and other safeguards on the use of the information (for example, by way of an undertaking, or restricting who may inspect the documents):

(k) the practicality of giving some or all of the information to the beneficiary in redacted form:

(l) if a beneficiary has requested information, the nature and context of the request:

(m) any other factor that the trustee reasonably considers is relevant to determining whether the presumption applies.