Section HC 1 — Income Tax Act 2007: What this subpart does

HC 1 What this subpart does What this subpart does (1) This subpart, together with the trust rules,— (a) provides for the taxation of distributions from trusts, for this purpose defining— (i) beneficiary income: (ii) a taxable distribution: (b) provides for the taxation of trustee income: (c) classifies trusts into the following 3 categories for the purposes of determining the treatment of distributions that are not beneficiary income: (i) complying trusts: (ii) foreign trusts: (iii) non-complying trusts: (d) determines who is a settlor, and sets out their income tax liability: (e) sets out the treatment of trusts settled by persons becoming resident in New Zealand. Excluded: certain funds and distributions (2) The trust rules do not apply to— (a) a unit trust: (b) a group investment fund to the extent to which it is treated as a company under this Act: (c) a Maori authority: (d) a distribution under section HZ 1 (Distributions from trusts of pre-1989 tax reserves). Disclosure requirements: non-resident trustees (3) Section 59 of the Tax Administration Act 1994 requires the disclosure of a settlement on a trust with a non-resident trustee. Avoidance arrangements (4) Section GB 22 (Arrangements involving trust beneficiary income) may apply to treat a beneficiary as receiving property, or enjoying services or benefits, in fact received, or enjoyed, by another person. Superannuation funds entering trust rules (5) A superannuation scheme that is treated as a company because it is a unit trust and then becomes a superannuation fund is treated as— (a) liquidated under section CD 12 (Superannuation schemes entering trust rules) immediately before the date on which it becomes a superannuation fund; and (b) no longer a company. Defined in this Act: arrangement , beneficiary income , company , complying trust , distribution , foreign trust , group investment fund , income tax liability , liquidation , Maori authority , non-complying trust , non-resident , resident in New Zealand , settlement , settlor , superannuation fund , superannuation scheme , taxable distribution , trust rules , trustee , trustee income , unit trust , Compare: 2004 No 35 ss GC 14 , HH 1(8), (9) , HH 3(6) , HH 4(8) , Income Tax Amendment Act 1988 (No 5) s 9