MELISSA LEE: NATIONAL LIST MP

LOCAL NEWS MELISSA LEE: NATIONAL MEMBER OF PARLIAMENT

As spring came to New Zealand in early September, the country was struck with heavy hearts at news of the passing of HM Elizabeth II, Queen of New Zealand, while many New Zealanders still slept and awoke to the reports.

After the festivities of her Platinum Jubilee that was celebrated with luncheons, high teas, and services of thanksgiving only a few months ago, we now remember a life lived in service. The Commonwealth has now turned to reflecting on her reign of over 70 stable years as a leading figure for many peoples of the world. Her reign oversaw great societal changes and upheavals while she remained the strength and stay of many and as a symbol of a vanishing generation that left an indelible mark on history. When the Queen took her place as Head of the Commonwealth, it was as a leader in a world still reeling in the aftermath of World War II, rationing had yet to cease, the Cold War was on the rise and the world was turning to its next stage of political and societal dialogue.

To quote National Leader Christopher Luxon in the Parliamentary Address following her passing, “She uniquely understood the ark and the pattern of history. She was, indeed, a part of what has been referred to as "the greatest generation"; a generation that made big personal sacrifices but, by and large, made no demands from the generations that followed and prospered economically, politically, and culturally because of their sacrifices.” The address in our parliament in September was such a rare occasion that all business stopped in our parliament - a momentous pause to reflect on the passing of our Head of State, the transfer of the Crown to Charles III and to acknowledge the Queen’s special devotion to New Zealand and the Commonwealth.

When we celebrated her Platinum Jubilee, some people asked me as a New Zealander being of Korean birth, raised in Malaysia and coming to New Zealand as a young adult, why I regarded Her Majesty with such regard, for them I cite my speech in the House in February:

“Like many first-generation New Zealanders, the first moment we know we are New Zealand citizens, that we truly in fact belong in this country, is when we take the oath and affirmation of allegiance, the final step towards citizenship and a sign of loyalty to the sovereign Queen of New Zealand, representing our democratic institutions and our Kiwi way of life. I'm proud to be a member of parliament, having sworn the oath to her in my mother tongue, Korean, at the start of this parliament and at many more occasions to come. I just want to say, you know, there are some who actually disrespect that, but all I can say is I'm very pleased that I'm a New Zealand citizen so help me God, and “God Save the Queen!”

For many New Zealanders, their grief in the loss of Her Majesty is representative of a strong loss and permanent change. She's been a constant presence in an ever-changing world. She has been on our coins, on our passports and for so many, she has been in our hearts. Her passing is also reflective the wider grief many of us have felt losing loved ones through Covid-19 and through the wider passage of time slipping older generations from our hands through age. Almost all of us have lost someone special at a time when we could not be there. The Queen’s words to the world gave immense comfort at a time when many did not know what would come next in the darkest days of the pandemic. As the world recovers slowly and we look in hope to new beginnings, her words in that broadcast remain one of her finest moments, her duty through adversity standing unyielding bringing comfort to all.

“We will succeed - and that success will belong to every one of us. We should take comfort that while we may have more still to endure, better days will return: we will be with our friends again; we will be with our families again; we will meet again.” Rest in peace, Your Majesty. You have earned it. (MELISSA LEE MP)  PN National Member of Parliament

National Spokesperson for Broadcasting & Media| Digital Economy and Communications | Ethnic Communities E: mplee@parliament.govt.nz Authorised by Melissa Lee, Parliament Buildings, Wellington

If you require any assistance I and my office are always happy and ready to provide advice and support

Please get in touch on 09 520 0538 or at MPLee@parliament.govt.nz to make an appointment. Melissa Lee National List MP based in Auckland

MPLee@parliament.govt.nz • melissalee.co.nz • mpmelissalee

Funded by the Parliamentary Service. Authorised by Melissa Lee, Parliament Buildings, Wgtn.

DAVENPORTS LAW: TRUSTS, TAX, AND AUSTRALIAN BENEFICIARIES

Mark and Jane had three children. Their eldest daughter had settled on the North Shore where Mark and Jane had brought up their family; one had married a South Islander and was now farming near Methven and their youngest daughter, Kate, had moved to Sydney five years ago, purchased property and looked likely to settle there long term.

Over the years Mark and Jane had built up a very successful property portfolio. They had heeded the advice of their accountant many years ago and all the properties were in a trust. Mark and Jane were the trustees, together with their accountant. The trust had recently sold one of its commercial properties and the trustees had agreed to distribute some of the capital to the three children.

Their trustee accountant also suggested that it was timely to review the trust, its purpose and documents. She also mentioned that she would be retiring in the next couple of years and wasn’t keen to remain on as a trustee and that part of the review should be considering a succession plan for trustees. Mark and Jane were going to go and see their lawyer, but their accountant said that trusts have become very specialised and she recommended a lawyer who was an expert in the area.

Mark and Jane set up a meeting and went to see the trust lawyer. She reviewed the trust deed and made some recommendations of some minor changes to bring the trust deed up to date. They told her that their accountant was going to be retiring as a trustee in the next couple of years and said that they would be keen for their children to become trustees at that time. The lawyer gave them good advice around retaining a professional trustee because as she said “you don’t want your children telling you what to do with the trust assets”.

The lawyer then asked some questions about the children and their circumstances. Mark and Jane told her about the distribution they were about to make to each of them to help them reduce their mortgages. The lawyer gave some really good advice around making sure that any gift or distribution

Tammy McLeod would be structured in a way to ensure that the money would be protected from the children’s partners. This wasn’t a major concern for Mark and Jane as they really liked all of their children’s partners, but they did recognise that things could change in the future.

More alarming was what the lawyer said about Kate in Australia. She explained that Australia doesn’t love trusts the way we do in New Zealand and that if an Australian tax resident receives a distribution from a trust - even a New Zealand trust, that distribution will be taxable in Australia. This was of concern, not just with the funds that Mark and Jane wanted to give to Kate from the sale of the commercial property, but if they died, they didn’t want Kate’s share of her inheritance to be taxable. The lawyer went through some restructuring they would need to do to ensure that anything Kate might receive from them now, or in the future, would be via them or their estate rather than the trust.

She also mentioned that it would be really important, regardless of what they decided to do with their trustee succession plan, that Kate not be appointed as a trustee. If a New Zealand trust has an Australian tax resident trustee, this will pull all the assets of that trust into the Australian tax net, which can be an unintended consequence of using a family member as a trustee.

Even though Australia is our closest neighbour, and the country which is arguably the most like New Zealand, their laws around trusts and tax are vastly different to those in New Zealand. There needs to be very careful planning if a trust has Australian beneficiaries and it is important that Australian tax residents are not trustees (nor have the control of the trustees) of a New Zealand trust.

Mark and Jane were fortunate that they took advice before doing anything. This gave them an opportunity to carefully structure their affairs. Others aren’t so lucky. If you have any questions at all, seek specialised advice.