Ordinarily, double tax conventions restrict their benefits to residents of the states that are parties. Moreover where a resident of one state claims relief in respect of income derived from the other state, the claimant must ordinarily be “beneficially” entitled to the income in question....

Sections HH 1 and HH 8 of the New Zealand Income Tax Act 1976 contain a special regime for the taxation of trusts. Income that is distributed by the trustee is taxed in the hands of the beneficiary, and income that is accumulated is taxed to the trustee. The mere fact of the trustee being...

In the late 1980s New Zealand undertook a process of adopting a new income tax regime for companies, and in particular for controlled foreign companies. The new rules reflected a change from a classical to an imputation system. The rules were designed to frustrate avoidance deferral that was...

Section 99 of the Income Tax Act 1976 provides that agreements purporting to alter the incidence of tax shall be void against the Commissioner for tax purposes. Tayles & Tayles v Commissioner of Inland Revenue [1982] 2 NZLR 726 involved a complex arrangement of trusts and partnerships. The...

Section 75(1) of the Income Tax Act 1976 required that income from a trust be taxed either in the hands of the beneficiary or in the hands of the trustee, but not both. A sub trust is usually used to obtain the tax advantages of having income taxed to the beneficiary under section 75(1), while...

Trusts fit uneasily into any tax system. The beneficiary should be taxed on any trust income received; yet the trustee also receives income that is amenable to taxation. It would not be fair for the income to be taxed to both the beneficiary and the trustee, yet neither should the trustee escape...