2. Sources Of Law

A. Trust Creation And Administration

New Zealand trust law is substantially derived from the laws of England. The governing statute is the Trustee Act 1956. The Law Commission is undertaking a full review of the Trustee Act 1956 with a view to modernising this statute. There are two other statutes, the Trustee Companies Act 1967 and the Trustee Companies Management Act 1975; but they have limited application to a handful of statutory trustee companies incorporated in New Zealand.

The operation of trustee companies that are not statutory trustee companies under the Trustee Companies Act 1967 is relatively unregulated.

Two other relevant statutes are the Perpetuities Act 1964, which modifies the common-law rules against perpetuities and accumulations, and the Charitable Trusts Act 1957, which provides for the incorporation and regulation of charitable trusts. Incorporation is not required under this Act to achieve charitable status, whether for general public purposes or for tax purposes. In practice, registration is often undertaken by a charitable trust to achieve body corporate status and an enhanced public profile.

A very significant change in respect of charities has been the enactment of the Charities Act 2005, under which all existing charities had to register by 1 July 2008 to maintain their tax exemptions and tax rebate status. New charities will also have to register to obtain these tax exemptions. The purpose of this statute is to ensure a greater level of transparency and public disclosure to minimise the risk of mismanagement or misuse of charitable assets and donations. The provisions of this statute have to be complied with in tandem with the rules contained in the Income Tax Act 2007 that apply to charities.

B. Property, Estate And Probate

The primary statutes relevant to real estate are the Land Transfer Act 1952, and the Property Law Act 2007. As well as dealing with real estate matters, the Property Law Act 2007 also addresses formalities of deeds and other instruments. The New Zealand framework for land law is a registered title system based upon the Torrens system. Many of the registration processes are now entirely electronic, and the system operates very reliably and efficiently.

The law relating to wills and succession comprises common-law principles together with the Administration Act 1969, and the Wills Act 2007, which applies to wills of individuals who die on or after 1 November 2007. The precursor of this statute was the Wills Act 1837 (UK), which is an imperial statute that is still part of New Zealand law. This latter statute has been amended by the Wills Act Amendment Act 1852 (UK), the Wills Amendment Act 1955 (NZ) and the Wills Amendment Act 1977 (NZ). There are transitional provisions which may apply, so in some cases both the new New Zealand statute and the UK statute (as amended) will need to be reviewed.

A statute called the Family Protection Act 1955 gives the courts some limited scope to allow claims against the estates of deceased persons for maintenance where it is considered that the deceased failed to make adequate provision for a spouse, children, grandchildren, and in some circumstances, for stepchildren and parents.

C. Taxation

Taxation revenues in New Zealand are derived substantially from income tax levied under the Income Tax Act 2007 and the Goods and Services Tax Act 1985. Revenue is also raised from excise duty and a number of other minor direct taxes.