Settlements

From 2022 tax year onward, trusts that are required to comply with trust reporting requirements need to declare all settlements made during the year. In the first year that a trust is subject to trust reporting, details of all historic settlors (but not the amounts of their settlements) need to be declared.

Please refer to Inland Revenue’s Operational Statement on Reporting Requirements for Domestic Trusts for guidance on Inland Revenue’s approach to the information required to be disclosed.

Add a Settlement

1. Go to Workpapers > Settlements, select New
2. Complete the details of the settlement
3. Click Save.

Details will appear in the Settlements summary screen.

To Edit or Delete a settlement record, click on it in the Settlements summary screen to open the record and make changes.

If the trust is exempt from the financial reporting requirements and therefore not required to file settlor information, change the response to the question The trust is exempt from complying with the trust reporting requirements in Workpapers > Financial Disclosures. When exempt, details of the settlor information will not be included in the tax return.

Settlor details

• Tax jurisdiction – this is the jurisdiction of tax residency of the settlor
• IRD number or tax identification number
  • If the settlor’s tax jurisdiction is New Zealand, a valid IRD number must be provided.
  • If the settlor’s tax jurisdiction is overseas, a Tax Identification Number must be provided. If no Tax ID number is available a reason must be provided by selecting one of the following options:
    • Jurisdiction does not issue tax ID numbers, or
    • Tax ID Number not required in this jurisdiction
• Date of birth or commencement – this is the date of birth for individual settlors, or the date of commencement for non-individual settlors, such as the date of incorporation for companies or the date a trust was formed
• Were any settlements made this year – select No for settlors who only made settlements in prior years. In this case no further details are required. Select Yes for settlors who made settlements in the current year and provide further details of those settlements.
• Were any settlements valued at zero – select Yes if settlements, or deemed settlements, were made during the year but are valued at nil.

Settlement amounts

• For settlements during the year that have a value, enter the value next to the appropriate category. 
• If the category is Other, provide a description of the nature of the other settlements.