Stop the 39% Tax Hike Draining Your Family Trust
The rules for NZ Trusts changed in 2024. If you aren’t active with your distributions, you’re likely overpaying. We’ve built the tools to help you navigate Section BG 1 and keep your tax legal and low.
The 39% Reality: What’s Changed?
The $10k Buffer
Trusts earning under $10,000 still sit at 33%. Cross that line by $1, and your entire profit hits 39%.
Beneficiary Splits
Allocating income to family on lower tax brackets is legal, provided the money actually reaches them.
BG 1 Red Flags
The IRD is watching for ‘artificial’ distributions. If it looks like a tax dodge, Section BG 1 voids it.
Distribution Chaos vs. The TaxNav Kit
Manual / High Risk
- Guessing distribution percentages
- No signed resolutions (Section BG 1 Risk)
- Paying 39% Tax Rate by default
The TaxNav Kit
- Legal 'Plain English' compliance logs.
- Auto-generated Trustee Resolutions.
- Optimized 33% split calculator.
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Your Questions Answered: In Plain English
How do I avoid a Section BG 1 red flag?
Section BG 1 is the IRD’s “Anti-Avoidance” tool. They use it to stop people from moving money around solely to pay less tax. To keep your Trust in the “Green Zone,” follow these three rules:
What is the $10k buffer rule
Formally known as the “De Minimis” rule, this is a safety net introduced alongside the 2026 tax changes. If your Trust earns $10,000 or less in profit (after expenses) for the year, you are not forced into the high 39% tax bracket. Instead, you get to stay at the lower 33% rate.
How often is the AI updated?
I personally review the logic strings whenever the IRD releases new guidance or new legislation or Orders in Council are passed (e.g., the 2026 39% Trustee rate changes). The “Brain” is always current.
Wait, so is income splitting actually legal?
Yes, splitting income is legal, but only if it’s ‘real.’ If the IRD sees money being ‘given’ to a child on a 10.5% rate but the parents still spend it on their own mortgage, that’s a red flag. The Kit ensures your paperwork matches your actions.
Can I talk to a human if I get stuck?
Yes. While the AI handles the translation, our monthly subscribers have priority access to help-desk support for app-related questions.
Don't let the 2026 rate hike catch you off guard. Get the Trust Distribution Kit today
Secure your distribution strategy, stay compliant with Section BG 1, and keep your family wealth where it belongs. The Kit is ready for you.
- 100% confidential. No obligations until you're ready to proceed.
- Updated for the 2026 39% Trustee Tax Rate changes.
- Takes 2 minutes. Your custom kit is sent via email immediately.