The establishment of a trust outside New Zealand by non-New Zealand persons prior to their becoming New Zealand resident is often undertaken. The fact and timing of “settlements” is critical in terms of the liability that the settlor of a trust may have in respect of foreign-sourced amounts.

An immigrant’s pre-immigration trust would not be subject to tax in New Zealand if it makes no distributions to beneficiaries resident in New Zealand and retains its investments offshore. It is be critical that subsequent settlement were not made.

Intending migrants to New Zealand should take advice on the procedures which must be followed and conditions which they must satisfy in order that their pre-immigration trusts are effective in New Zealand.