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Inland Revenue

Tax Policy

Application of financial arrangement rules to non-residents

Clause 120



The proposed replacement for section EW 9(4)(b) does not achieve the stated aim.

It is inappropriate for the section to refer to the trustee, together with the trust, as a trust, is neither a separate legal entity nor recognised as a person for income tax purposes.

Section EW 9(4)(b) should be rewritten more simply and directly along the lines that the amount is assessable income of the trustee under section HC 25.


Because the drafting is expressed by way of negative statements, the submitter believes this will give rise to confusion rather improving clarity.

Officials agree that the drafting of the proposed amendment should be reviewed.


That the submission be accepted, subject to officials’ comments.