Comings, goings; trusts, terms; contracting, conveyancing

Dear *|FNAME|*,

It’s a time of comings and goings here at the Canterbury Legal office. This month we farewelled litigation lawyer Sydney Austin, who is heading off overseas. Sydney first joined us as a summer clerk in 2016, and we wish her well in her travels.

But the team won’t be down a member for too long: Claudia Leighs will be joining us shortly as Senior Litigation Lawyer. We look forward to introducing you to her soon.

Are you up to speed with the new disclosure requirements for trusts?

If you have a domestic trust, you need to make sure that you’re up to speed with the new disclosure requirements you’ll need to meet.

These went into effect on 1 April 2022, with a main purpose of improving the Government’s understanding of how trusts are used in New Zealand. In particular, they’re trying to gauge if the use of trusts has increased in response to the 39% personal tax rate introduced in 2021, as the top tax rate on trusts remains 33%.

So what’s changed? On top of annual income tax returns, you now need to file an annual trust return, covering the following areas.

Settlements

• The details of any settlements (transfers of value) made to the trust, including the nature and the amount.

• The details of the settlor(s), including name, date of birth and IRD number.
  
  

Beneficiaries

• The details of any distributions made to beneficiaries (persons or entities who benefit from the trust).

• The details of any those beneficiaries.
  
  

Power of appointment

• The details of any people who hold powers of appointment (including adding or removing trustees and beneficiaries, or altering the terms of the trust deed).

• The relevant details include name, date of birth, IRD number, and commencement and cessation dates.
  
  

If you’re unsure whether you’ve met these requirements, please get in touch with our team.

Dotting the ‘i’s and crossing the ‘t’s on your Ts & Cs

Terms and conditions, terms of trade—for many of us, they’re the things we gloss over when signing up for a service or buying something.

But if you’re in business, it’s vital that you have a good set of them yourself—and to make sure they’re up to date. They can be the difference between having a well-oiled business, and, well, going out of business.

Done well, they’ll clearly set out what each party can expect from the relationship. That gives you both certainty, helps limit your risks, and generally leads to good business relationships.

You can create terms of trade or terms and conditions yourself. But the risk is that they won’t do what you need them to do. There’s a lot of nuance required, and you might find that terms you create yourself won’t be enforceable when you need to rely on them.

The good news is: we can help you draft them the right way.

Monthly Housing Update

Following last month’s report from Trade Me that Canterbury home prices were beginning to cool, QV reports that Canterbury has seen its first quarterly home value drop since the COVID-19 pandemic began. In the three months to the end of June, values in the region dropped by 1.2 percent, including a drop of 1.7 percent in Christchurch.

Still, the city is faring better than other parts of the country. Average values are sitting at the same place they were at the start of 2022, versus drops of 5.6 percent and 8 percent in Auckland and Wellington respectively. And across Canterbury, prices are still up 20.9 percent from where they were this time last year.

If you are considering buying or selling property, contact our conveyancing team.

Is your Uber driver an employee of Uber, or a contractor? The question pops up again

The question of whether people working in the ‘gig economy’ are employees or contractors has risen again, as unions First Union and E tū brought a case last month before the Employment Court, seeking to have Uber drivers declared employees of Uber.

Chief Employment Court Judge Christina Inglis, who heard the matter, has reserved her decision and indicated she will deliver it by October.

The decision would introduce greater certainty around the classification of employees and contractors in New Zealand. A 2020 case, also heard by Judge Inglis, held that a particular courier driver was an employee. Conversely, a 2021 Employment Court case about a specific Uber driver held that driver was a contractor.

But in the latter case, the judge was careful to note it applied only to the facts of that specific case. The current case, about Uber’s drivers generally, could have broader implications.

It’s an issue that’s also been addressed recently by a tripartite working group, consisting of government, BusinessNZ and the New Zealand Council of Trade Unions.

The current problem, as they saw it, is that some contractor arrangements are being used to avoiding meeting employment requirements while burdening workers with risks and compliance costs.

The working group made several recommendations for reform, including stronger legislative definitions of what an ‘employee’ is, distinguishing them from someone “genuinely in business on his or her own account”.

Thanks *|FNAME|*.

That's it from us for this month. As always, we’re just an email or phone call away for any questions, help or advice. We look forward to chatting with you next time - when spring will finally have sprung!

Regards,

Clive, Grant and the Team at Canterbury Legal