The recent media coverage with reference to New Zealand foreign trusts portrays it as a sexy airport thriller with an addition of wealthy people, financial deals and exotic lands. The trust is, however, different than viewed since most of the things regarding tax is a bit more mundane.
The OECD is an organization responsible for maintaining a list of tax havens in the world and New Zealand has never been and does not seem likely to join that list. The main characteristics of countries with tax havens are that they impose no or nominal taxes. They also lack transparency and that their procedures and laws prohibit the exchange of intelligence and information with other governments. New Zealand does not even have a secretive private banking industry.
The requirements placed on trustees and how it handles foreign trusts are a few ways in which New Zealand has continually shown leadership in tax transparency. All of this goes towards assisting governments that request significant information.
Michael Cullen introduced new rules in 2006 after extensive consultation. His rigorous regime required that a New Zealand resident trustee of a foreign trust to submit a Foreign Trust Disclosure and keep financial and various records for tax purposes. The details include particulars of settlements, trust deed, specifics of the trust’s assets and money that the trustee receives and spends. Trustees should keep information about codes of account and the accounting system.
Heavy penalties were implemented for those who failed to keep records in New Zealand and be recorded in English. In 2011, these powers were enhanced with the implementation of world standard money laundering legislation.
In various countries, settling of a trust requires a person to report the settlement of funds to their own central banks, revenue authorities and other authorities. New Zealand has thirty-nine double tax agreements. These agreements are designed to decrease tax inhibitions to investment and cross-border. This helps in preventing tax evasion and tax avoidance.
Respected New Zealand accountants and trust lawyers operate foreign trusts on international client’s behalf hence enhancing New Zealand’s reputation amongst international taxation experts and the OECD.
Geoffrey Cone is a graduate of the New Zealand’s University of Otago. He was a bright kid and excelled with a diploma in tax and trust law. He started working in Auckland in 1980 then moved to Christchurch. It was at Christchurch where he became a chairman and partner of a leading law firm. He then started practicing commercial litigation, trust advisory and taxes. He later appeared at various levels as a chief counsel.
In 1995, he joined British West Indies as a leading litigator for less than two years then returned to practice his trade in Auckland. He then started his own firm called Cone Marshall Limited.