Section HC 35 — Income Tax Act 2007: Beneficiary income of minors

HC 35 Beneficiary income of minors When this section applies (1) This section applies when a person who is a minor derives an amount of beneficiary income from a trust in an income year. Subsection (4) and sections HC 36 and HC 37 override this subsection. Treatment of amount derived (2) The amount is— (a) excluded income of the minor under section CX 58 (Amounts derived by minors from trusts): (b) treated as trustee income for the purposes of determining the rate of tax that applies, who pays the relevant tax, and who provides the return of income. Meaning of minor (3) For the purposes of this section, and sections HC 36 , HC 37 , LE 4 , and LF 2 (which relate to the treatment of tax credits of beneficiary minors), a minor is a natural person resident in New Zealand who is under 16 years of age on the trust’s balance date for the income year. Exclusions (4) This section does not apply— (a) if the total amount of beneficiary income that the minor derives from the trust in the income year is $1,000 or less; or (b) to beneficiary income derived— (i) from a trust settled in the way described in section HC 36 : (ii) from a testamentary trust described in section HC 37 : (iii) from a Maori authority: (iv) directly from a group investment fund: (v) by a person for whom a child disability allowance is paid under the Social Security Act 1964 . Relationship with other provisions (5) This section overrides sections HC 5 , HC 18 to HC 20 , HC 22 , HC 23 , and HC 32 . Defined in this Act: amount , beneficiary income , excluded income , group investment fund , income year , Maori authority , minor , pay , resident in New Zealand , return of income , settlement , trustee , trustee income , Compare: 2004 No 35 ss HH 3A–HH 3C , HH 3E , HH 3F(2), (2A) Section HC 35(4)(a): amended (with effect on 1 April 2008), on 6 October 2009, by section 266(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).