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Individual income tax Tāke moni whiwhi mō te takitahi

Distributions from a trust that are not beneficiary income

If you receive a distribution from a trust:

  • that is not a distribution of beneficiary income that you have included in your individual tax return (IR3), and
  • you are not a settlor of the trust

you will need to include this distribution as part of your income for Working for Families (WfFTC) and student loans.

Example

Matt is the beneficiary of a family trust that has a cash PIE investment. The income was taxed at the 28% notified prescribed investor rate (PIR). This means that when the trust pays this income on to Matt, he doesn't need to include this in his tax return.

The trust doesn't have any other taxable income so any distributions it makes to Matt aren't treated as beneficiary income. The trust distributes $2,000 income from the PIE investment to Matt.

Matt doesn't include the income in his tax return, but the distribution is part of his income for WfFTC and student loans and he needs to let us know how much he received.