Did you know trustees are personally liable for the tax obligations of a trust?
You may think this is obvious, but have you thought about what tax consequences there may be when you resign as a trustee?
The Inland Revenue Department (IRD) have recently released a notice reminding trustees to keep their records up to date -
- If you resign as a trustee, the IRD must receive notice of this in writing, as soon as possible following the resignation, so they can update their records.
- If you do not send, or delay sending written confirmation, the IRD will still recognise you as a trustee until they receive your written resignation, which makes you liable for any tax obligations of that trust.
For income tax and GST purposes, trustees may be liable for any outstanding tax for the periods they were trustee. This includes the period of time between their resignation as a trustee and the IRD receiving written confirmation of the resignation. This liability continues until any debt is paid.
If you are unsure whether your trustee resignation has been processed with the IRD, please contact your regular accountant to discuss.
RSM New Zealand has a dedicated trust administrator who is able to assist our clients with the management of their trusts