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Government brings in foreign trust law changes

NZ NewswireNZ Newswire 8/08/2016

<span style="font-size:13px;">Revenue Minister Michael Woodhouse has introduced a bill that will tighten the rules around foreign trusts.</span> © Getty Images Revenue Minister Michael Woodhouse has introduced a bill that will tighten the rules around foreign trusts. The government has introduced a bill that will tighten the rules around foreign trusts.

The changes were recommended by tax expert John Shewan, appointed by the government to review existing legislation following the release of the Panama Papers.

The papers revealed details of hundreds of thousands of foreign trusts around the world, and New Zealand was mentioned numerous times.

More than 11,000 have been set up in New Zealand.

Foreign trusts are legal but they can be used to hide wealth from tax authorities and to launder money.

Mr Shewan concluded New Zealand wasn't a tax haven but its rules were light-handed and needed strengthening.

The government accepted all his recommendations.

Revenue Minister Michael Woodhouse has put the changes into a wider tax bill, already in the pipeline, that simplifies processes, reduces compliance costs and makes GST rules more business-friendly.

"Following the Shewan inquiry the government committed to moving quickly on the changes to foreign trust disclosure rules and the inclusion of those changes in this bill reflects that," Mr Woodhouse said on Monday.

Parliament resumes on Tuesday and the bill is expected to be given its first reading this week.

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