Resigning as a trustee of a trust
Trustees are personally liable for the tax obligations of the trust.
If you resign as a trustee, the IRD must receive this as a written notification, as soon as possible following the resignation, so they can update your records.
Be aware that if you resign as trustee of a trust and fail to send IRD written confirmation, IRD will still recognise you as a trustee, which makes you liable for any tax obligations of that trust.
Similarly, if you resign as a trustee of a trust and delay sending IRD written confirmation, IRD will remain to recognise you as a trustee up until they receive your written resignation.
What does this mean?For income tax and GST purposes, you may be liable for any outstanding tax for the periods you were a trustee. This includes the period of time between your resignation as a trustee and IRD receiving written confirmation of your resignation.
IRD added, “This includes the period of time between their resignation as a trustee and us receiving written confirmation of the resignation. This liability continues until any debt is paid.”
The best thing you can do as a trustee is to have all your trust accounting and tax matters reviewed by Alliotts in Auckland to both ensure that all the correct checks and balances are in place and that there is a formal schedule of communication with respect to keeping IRD informed of any changes, which inevitably do happen. Call us today on 09 520 9200.
Source NZ IRD