How to wind up a family trust in New Zealand
Last updated 25 September 2026
Many family trusts were set up years ago for reasons that no longer apply. Some trustees now wonder whether the trust is worth keeping, especially since the trustee tax rate rose to 39 percent from 1 April 2024. This guide explains what winding up involves. It is general information. Winding up a trust needs a lawyer, and usually an accountant too.
Why trustees consider it
- The reason the trust was set up no longer applies.
- The cost and paperwork of running it feel out of proportion to what it holds.
- The trust has reached, or is near, the end date set in the deed.
- The family’s circumstances have changed, such as a death or a separation.
Winding up can have tax, relationship property and rest home subsidy consequences. Talk to your lawyer and accountant before deciding.
The usual steps
1. Read the trust deed
The deed sets out when the trust ends, who can decide to end it early, and who receives what is left. Some deeds give trustees a power to bring the end date forward. Others do not, which changes the options.
2. Get advice
A lawyer confirms what the deed allows and how to do it. An accountant looks at the tax effect of moving assets out of the trust, including any property.
3. Make and record the decision
The trustees decide, usually unanimously, and record it in a written resolution: that the trust will be wound up, when, and who receives the assets.
4. Deal with debts and money owed
Pay what the trust owes. Deal with any money owed to the trust, such as a loan from the sale of the family home to the trust, as your lawyer advises.
5. Distribute the assets
Transfer what remains to the beneficiaries entitled under the deed. Land needs a transfer registered with Land Information New Zealand. Bank accounts and investments are closed or moved.
6. Finish with Inland Revenue
File a final tax return, including the trust disclosures, and tell Inland Revenue the trust has ended.
7. Keep the records
Keep the trust records after the trust ends. Ask your lawyer how long to keep them for.
Before you start
It helps to have the trust’s records in order first: the deed and any variations, a list of what the trust owns and owes, past resolutions and the latest financial statements. The trust compliance checklist shows what to gather.