For families with ties to both New Zealand and Australia, estate planning can quickly become more complicated than expected. It’s not uncommon to have a family home in one country, a holiday property or trust in another, and children living across both. But when it comes time to administer the estate, those cross‑border connections introduce a range of legal and administrative hurdles that require careful planning—and often, specialist advice.
Why One Will May Not Be Enough
While both countries operate under common law systems, they have entirely separate legal frameworks governing estates. This means a will prepared and proved in one country may not automatically be accepted in the other.
For example, if a person dies domiciled in New Zealand but owns real estate in Western Australia, the executor will need to apply for a reseal of the New Zealand probate in the Supreme Court of Western Australia before that property can be dealt with. This process involves filing an application, paying a filing fee, and providing certified copies of the original probate and death certificate. Each Australian state has its own rules—some require additional affidavits or even fresh applications for letters of administration if resealing is not permitted.
What Executors Should Know
Executors in both countries carry similar responsibilities: to collect and protect the assets, pay any debts, and distribute the estate in accordance with the will or the laws of intestacy. But administering an estate that crosses borders adds new layers of complexity.
For instance
- An executor may need to open separate estate bank accounts in each country.
- They must deal with different tax reporting requirements—especially if the estate earns income during administration.
- If a family trust is involved, the trustee may also need to assess their duties under two sets of trust law.
In Australia, executor duties are defined by state legislation and common law principles. In New Zealand, the Administration Act 1969 and Trusts Act 2019 set out the relevant rules. New Zealand’s law also emphasises beneficiary rights more strongly—for example, under the Trusts Act 2019, trustees have a presumption of disclosure, meaning beneficiaries are entitled to receive certain information about the trust unless there is a good reason not to.
Tax Considerations: More Than Meets the Eye
Neither New Zealand nor Australia has inheritance tax, but that doesn’t mean tax won’t apply. In Australia, capital gains tax (CGT) can apply when assets pass from the estate to a beneficiary—particularly for non‑exempt property like investment real estate. This is a key issue where a New Zealand resident dies holding Australian property.
Conversely, New Zealand has no general CGT, but tax residency of trusts can trigger unintended consequences. A New Zealand trust with an Australian resident trustee may find itself subject to Australian income tax rules, which are more stringent.
Here’s an example of how this could happen:
A couple in New Zealand have a family trust of which they are trustees. They have two children, one child lives in Australia and one in New Zealand. One of the couple dies and the surviving trustee decides to step down and appoint the child that lives in Australia as trustee.
The trust owns an investment property in New Zealand. The trustee decides to sell and distribute the funds from the sale of the investment property to the beneficiaries, being the two children, one resident in Australia and one in New Zealand.
There are new disclosure rules in New Zealand and information sharing between the international revenues of countries means these types of transactions are picked up.
The distribution to the child in Australia from the trust is taxable in Australia. Also because the Australian resident child is the trustee of the trust this means that the trust will also be pulled into the Australian tax net and the trust could be subject to CGT.
Executors and trustees need to be aware of these traps, especially if they are administering a trust or estate across borders. In some cases, restructuring the trust or appointing a local co‑trustee can help mitigate issues.
If you or your family have assets or beneficiaries in both New Zealand and Australia, don’t wait until later to put the right estate plan in place. Cross-border estates aren’t necessarily unmanageable but without the right plan they can become expensive, delayed and emotionally stressful.
About the Author: Barbara is experienced in estate planning and trusts in both the New Zealand and Australian jurisdictions.
