Welcome to the KTS update for October.
In this update we talk about:
- Winding up your trust - is it a good idea?
- Enduring Power of Attorney - have you thought about this?
- Labour's plan to up the higher tax rate to 39% - what to do for tax planning?
Winding up your Trust - some things to consider:
If you are considering winding up of your existing Trust as the compliance with the new Trusts Act 2019 seems untenable, a careful review of your particular trust situation should be made.
Enduring Power of Attorney - have you thought about this?
We often come across situations where people have wills in place which deal with distribution of their assets to their loved ones. More often than not we encounter situations where individuals have not put in place enduring powers of attorney (EPA) for their assets or personal care and welfare and the nightmare that can be associated with that.
Whilst everyone seems to have a pretty good idea of how they want their assets distributed upon death, people do not tend to think about what will happen and how they will be taken care of should they become incapacitated.
Labour's plan to up the higher tax rate to 39% - What to do for tax planning?
Grant Robertson has announced that should Labour will the election, they are intending to hike up the top individual marginal tax rate from 01 April 2021 on income over $180,000 to 39%. There should be no other increases to current tax rates.
Assuming this proposal will go through, the disparity in tax rates will no doubt result in effective tax planning all over again. Keeping the good old trusts alive may make good economic sense, despite the more onerous rules that will be imposed on the Trustees.