At the surface, the new about New Zealand foreign trusts seems quite appealing and thrilling. However, the facts are more mundane. Firstly, New Zealand has never been and is unlikely to become a tax haven in the near future.
A tax haven is a jurisdiction where little or no taxes are imposed. Secondly, these places have laws that prevent any form of transparency. They also create laws that prevent the exchange of information with foraging governments. Almost no details about their banking industry exist.
In fact, New Zealand was among the first countries globally to be recognized for transparency in their banking industry. The government of New Zealand is very responsible in the handling of foreign trusts and the guidelines for the trustees. The law makes it clear that clear records must be kept for taxation and disclosure purposes.
Failure to adhere to these regulations usually leads to huge financial penalties. Additionally, the country has signed 39 double tax agreements with foreign governments. It also has more than 20 information exchange agreements. These agreements are signed with some of the major economies around the world. All of these actions indicate that New Zealand is not a tax haven.
Foreign trusts in the country are mostly used for succession planning and asset protection. Most people who set up a trust are not seeking tax planning. The reason trusts have been growing in the country is that it is viewed as a stable economy. Additionally, they have strong laws and a high-quality judiciary that has a professional infrastructure. The reputation of safety and security is what has prompted many trusts to be set up in the country.
While the creation of a stable regulatory environment has played an important role in making the country attractive to trusts, there is another reason. The professionals entrusted as trustees are quite competent. Most of them are certified members of STEP (Society of Trust and Estate Practitioners). Their professionalism has helped to build a great reputation for New Zealand. The country is not in competition with tax havens. It competes with world leaders that have an awesome banking sector such as the US, Britain, and Singapore. Any issue with a trustee should be handled through the robust judicial system. It should not be used as an excuse to blight the entire stable trustee management sector in the country.
About Geoffrey Cone
Geoffrey Cone works in a firm involved in trustee management services. Cone Marshall Ltd. It is the only firm in New Zealand, which specializes exclusively in international tax planning and trust. Before that, he was a partner at a leading firm in Christchurch. The firm specialized in tax advisory work and commercial litigation. He has represented clients in court at all levels.