Family trusts have long been a cornerstone of wealth protection and intergenerational planning in New Zealand, with an estimated 300,000–500,000 trusts operating across the country. But in recent years, trustees and advisers have faced growing administrative pressure as compliance obligations, particularly around anti‑money laundering (AML) rules and Inland Revenue disclosures, have expanded. Recently that landscape shifted again with the Government moving to ease some of the regulatory burden on everyday New Zealanders.
One of the most significant changes is the Government’s 2025 announcement to simplify AML requirements for low‑risk property transactions involving family trusts. Under the existing framework, selling a home held in a trust triggered stringent documentation demands, requiring real estate agents and lawyers to collect extensive personal and legal information about all trustees and beneficiaries, along with a detailed explanation and documentation to prove how the home was paid for. This process was widely viewed as disproportionate for routine, low‑risk transactions. The proposed reforms will allow real estate agents to apply simplified customer due diligence where the risk is clearly low – meaning only basic checks such as verifying trustee identities, confirming ownership details, and retaining the trust deed will be required.
These reforms are part of a broader overhaul of New Zealand’s AML/CFT regime, including multiple amendment Bills progressing through Parliament. Expected to be fully enacted between late 2025 and 2026, these changes aim to make the AML framework more proportionate and easier to navigate for both families and professionals. Notably, the legislation will introduce new supervisory structures, refine definitions, and strengthen risk‑based obligations while keeping compliance focused on genuine threats rather than routine household transactions.
Parallel to AML changes, Inland Revenue has also begun re‑evaluating the trust disclosure rules introduced in 2021. These rules required trustees to prepare detailed financial statements and disclose comprehensive information about settlements, distributions, and beneficiaries. These measures were originally aimed at addressing tax‑rate misalignment. A new Taxation Bill proposes repealing the specific disclosure provisions from the 2026–27 income year onward, signalling a shift back to a more streamlined system. Importantly, while certain reporting requirements may be removed, the Commissioner would continue to rely on broad statutory powers to request trust information when needed, meaning trustees must remain vigilant.
Collectively, these developments reflect an emerging regulatory philosophy: reduce unnecessary compliance for ordinary families while preserving strong safeguards against financial crime. For trustees, the practical takeaway is twofold: First, while paperwork may decrease in some areas, especially around property sales, core obligations under the Trusts Act 2019 remain unchanged. Trustees must still act honestly, maintain accurate records, and administer the trust in the beneficiaries’ best interests. Second, ongoing monitoring remains essential. Inland Revenue and AML supervisors retain significant authority to seek information, and future guidance will shape how these rules operate in practice.
In 2026, New Zealand’s trust environment is entering a period of recalibration. For families, this could mean a welcome reduction in some red tape. For advisers and trustees, it presents an opportunity to revisit trust structures, refresh compliance processes, and ensure that each trust remains fit for purpose in a changing regulatory landscape.
If you want to discuss how these changes might affect you, contact us for expert advice.