NEW ZEALAND Law and Practice Contributed by: Brent Wicks, Violet Yu, Jonathon Russell and Sandy Chen, Cone Marshall Limited
• A wealth tax, inheritance tax, gift tax and/or a more comprehensive capital gains tax could be intro - duced in the future, depending on government policy, though no plans are confirmed as of 2025. • Bright-line rules may be adjusted post-election, as seen historically. • Historical bright-line rule changes include exten - sions to five years in 2018 (for properties bought on or after 29 March 2018) and ten years in 2021 (for properties bought on or after 27 March 2021). • The original two-year bright-line period was reintro - duced by the National government, effective 1 July 2024. • As of 9 June 2025, the bright-line test taxes gains on residential property (excluding the main home) at the owner’s income tax rate. (Exemptions apply for the main home, inherited property, and certain trust transfers with rollover relief.) The various applicable periods are as follows: (a) two years for properties bought on or after 1 July 2024; (b) ten years for those bought between 27 March 2021 and 30 June 2024; and (c) five years for those bought between 29 March 2018 and 26 March 2021. 1.6 Transparency and Increased Global Reporting New Zealand has taken steps to address tax avoid - ance and enhance transparency by implementing OECD-aligned Base Erosion and Profit Shifting (BEPS) measures, including strengthened transfer pricing rules, anti-hybrid provisions and limits on interest deductions. New Zealand participates in global information-shar - ing initiatives through full adoption of the Common Reporting Standard (CRS) into domestic law and a Model 1 Intergovernmental Agreement under the US FATCA regime. Both regimes mandate financial insti - tutions to report foreign account holders to New Zea - land’s Department of Inland Revenue for automatic exchange of information with applicable jurisdictions. While New Zealand does not currently have a public beneficial ownership register, there have been propos - als to introduce one in response to Financial Action Task force (FATF) recommendations. These measures
do leave clients feeling more exposed to increasing disclosure requirements, which may deter some indi - viduals from setting up effective structures. There is also currently no system that publicly reveals the beneficial owners of companies and limited part - nerships but this is under discussion under the Corpo - rate Governance (Transparency and Integrity) Reform Bill. New Zealand remains an environment where care - ful use of trusts and limited partnerships may still offer a degree of privacy, provided that full compliance with tax and anti-money laundering laws is maintained. 2. Succession 2.1 Cultural Considerations in Succession Planning It is common for the younger generation to need assistance from the older generation when entering the housing market. Most banks require parental funding for home pur - chases to be classified as a “gift” for mortgage approval, although typically families prefer to treat it as a “loan” to retain control and ensure repayment is made in the future, or the benefits are able to be applied equally amongst family members. Documenting financial assistance from parents as a loan, with a formal agreement, allows parents to recover funds if needed. This is particularly relevant when assistance is provided to a child and their spouse/partner – a break-up may split assets 50/50 under the Property (Relationships) Act 1976. Structuring the assistance as a loan safeguards the funds for the family and child, preventing loss to an ex-spouse/partner. In the fullness of time, the parents can choose to forgive the debt owed, or offsetting the amount received by the child via their inheritance in the future, if there is a need to equalise benefits among siblings. 2.2 International Planning When putting in place a succession plan, it is essential to know and understand who the beneficiaries are, and to consider how any cross-border legal, tax or
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