Trust the Kiwis
Recent figures released by the New Zealand government show users and abusers of trusts abandoning the country after it implemented transparency laws to regulate the trust industry.
New Zealand trusts have built up a particularly good reputation amongst offshore service providers for their ability to hide assets. They have been called the “Fort Knox of asset protection”.
But in response to the Panama Papers the New Zealand government changed the law to compel all New Zealand foreign trusts to register (a foreign trust being a New Zealand trust where the money comes from a resident outside New Zealand), and provide details of who benefits from the trust, and who controls it.
Given that there are of course many entirely legitimate reasons why someone would want to hold an offshore, tax free trust, we would of course expect operators and beneficiaries of trusts to welcome such transparency!
Well it seems not. Recent data revealed in response to parliamentary questions from New Zealand's Green Party shows that weeks ahead of the deadline to register trusts, most trusts have failed to register and many have abandoned New Zealand. In total, out of more than 11,500 foreign trusts in New Zealand, fewer than 70 had signed up to the new register three weeks before the deadline for doing so.
This of course strongly suggests that many of the people using New Zealand trusts were doing so to hide their money. From whom? We don’t know, and perhaps never will.
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