Geoffrey Cone Provides a Response to an Article Regarding Foreign Trusts:
Some individuals have it all wrong: a foreign trust is not some type of exotic financial vehicle. The media environment, in New Zealand, sometimes makes such trusts sound very lavish. In reality, as is the case with matters associated with taxation, the foreign trust is standard fare.
New Zealand, First and Foremost is Simply Not a Tax Haven:
There is a list of tax havens, maintained by the OECD. New Zealand has never been on the list. In fact, it is not at all likely that New Zealand will be included. The main traits, associative of tax havens are that they impose no taxes, that there is transparency—lacking, and laws keep information, as to exchanges with other governments, non-disclosed. New Zealand does not have any of the preceding features, in order to carry out the true definition of a tax haven. New Zealand, too, does not have a private banking industry—that is highly secret.
When One Needs to Refer to Transparency the Model Agreement on Exchange of Information is the 2002 OECD Model Agreement:
The 2002 OECD agreement is relative to matters of tax. It is supportive of the International Exchange of Information. The International Exchange of Information is relative to enforcing and administering the tax law—domestically. When OECD’s White List is referenced: New Zealand was one of the first nations placed on it. New Zealand has adequately provided implementation of the agreed standard, on a global basis. New Zealand shows its leadership, as it pertains to transparency of the tax, in its handling of the foreign trust; as well as the regulations it places on the trustee. All of this type of legal relevancy goes towards other countries, requesting tax information, or information that is pertinent.
Michael Cullen, in 2006, provided new regulations, with regard to tax. The rules were provided not lightly however: He provided new rules after a great deal of consultation. The New Zealand citizen-trustee, of a non-domestic trust, is required, by IRD, to make available to them an IR607. This form is referred to as a: Foreign Trust Disclosure. The form is necessary in order to maintain that of financial records, and other records, respective of tax purposes in New Zealand. The records essential, to a foreign trust, include: details of the settlement and distribution (inclusive of the name of the recipient and his or her address), the trust deed, particulars with regard to the assets and liabilities of the trust; funds which the trustee receives as well as his or her expenditures. Further, if the trust is conducted under that of a Business, the trustee of it, must maintain data relative to the accounting operation, and the Chart of Accounts.
The records are to be maintained inside of New Zealand; recorded in English. A person who fails to perform to maintain records and adhere to the regulations, will acquire penalties. The enforcement of the Foreign Trust Law was enhanced, in 2011, when the World Standard Money-Laundering Legislation was enacted.
Notes Regarding Geoffrey Cone:
Geoffrey Cone is a graduate of the University of Otago, New Zealand. He holds a post graduate Diploma in the form of Tax and Trust Law. He began his practise, during the 80s, in Auckland, New Zealand. He then made the move to Christchurch, holding the post of Partner and the Chairman of Partners. Mr. Cone, during his tenure, at the significant law firm, practised in the area of Commercial Litigation. He was also involved in Trust and Tax Advisory projects. He was a leading counsel in all of the Courts—inclusive of the Privy Council.
He returned to Auckland, New Zealand, after a two -year period of working in the British West Indies, as a litigator. His return occurred in 1997. He then set up his own firm in 1999. The firm is Cone Marshall Limited and it is the only law firm, inside of New Zealand, to specialize in global trust and tax-planning; where it provides trust management services.