Hi,
There are tax consequences to consider whether an interest free loan is received from a NZ trust or from a NZ resident individual. The transfer of assets abroad legislation applies when a 'relevant transfer' arises. Under these rules, an individual who makes the transfer, or who benefits from it, becomes subject to Income Tax.
A relevant transfer is one which is a transfer of assets, and, as a result of the transfer, income becomes payable to a person abroad. You can see guidance here:
INTM600220 - Transfer of assets abroad: General conditions: Relevant transfer
INTM603640 - Transfer of assets abroad: Non-domiciled and deemed domiciled settlors from 6 April 2017: Valuation of benefits - payment by way of loan
As you will note, a person abroad may, in this context be an individual as well as trustees of non-UK trusts. You can see the guidance here:
INTM600360 - Transfer of assets abroad: General conditions: Person abroad
The following guidanceINTM603640 (https://www.gov.uk/hmrc-internal-manuals/international-manual/intm603640) is potentially relevant if the loan is made by a NZ trust.
INTM603640 - Transfer of assets abroad: Non-domiciled and deemed domiciled settlors from 6 April 2017: Valuation of benefits - payment by way of loan
You may also wish to review the following guidance for the general rules for determining a benefit under the provisions of s742B-s742E ITA 2007.
INTM601560 - Transfer of assets abroad: The benefits charge: Receives a benefit
You should also be aware of the exemptions from charge rules outlined here:
INTM602620 - Transfer of assets abroad: Exemptions from charge: Introduction
Thank you.
