Private Client: Year in Review 2025

In this publication we summarise some of the key trends we have seen in the private client area over the past twelve months, with a particular focus on developments in trust law, and updates on tax and immigration matters.

Increasing applications under the Trusts Act

Applications under the provisions of Trusts Act 2019, by both trustees and beneficiaries, are continuing to increase. Use of the "threat" of such applications to prompt negotiated outcomes is also increasing, perhaps reflecting a greater recognition amongst trustees, beneficiaries and their advisers of their effectiveness in the toolkit in either compelling action, or putting disputes to bed.

During the past twelve months, we have seen a number of applications under:

Section 112 and 114 (application for removal or appointment of trustee where it is difficult or impracticable to do so without the assistance of the Court)

This includes Singh v Singh [2025] NZHC 364, where the High Court declined an application for the removal and replacement of the trustees and board members of a charitable trust, including on the basis that the relevant powers under the Trusts Act did not extend to requiring election of board members; the Court not being satisfied there were sufficient grounds for intervention (including due to having concluded that the reason for the "impasse" amongst the existing trustees, which the application had been brought to cure, had been brought about by the actions of the applicants); and the Court not being satisfied that the orders sought would resolve the issue.

Section 124 (approval by the court of termination, variation or resettlement of a trust)

This includes Re Wilson [2025] NZHC 1000, where the High Court approved an application to vary the terms of a testamentary trust (in effect, vary the terms of a will as it related to a bequest to a minor), in circumstances where the terms of the bequest made it impracticable.

Section 125 (power of the court to waive the requirement that a beneficiary consent to the termination of a trust under section 121, or variation or resettlement of a trust under section 122).

This includes: 

• Re McCallum [2024] NZHC 3884, where the High Court approved an application under sections 124 and 125 to extend the vesting date of two family trusts, including on behalf of future beneficiaries, in order to enable the trustees to better manage tax and other practical complications.
• Re Application by Castle Trustees Ltd [2024] NZHC 3950, where the High Court approved an application under sections 124 and 125 terminating a testamentary trust on behalf of a group of contingent minor beneficiaries.
• Re Hill [2025] NZHC 1889, where the High Court approved an application under sections 122 and 125 to amend the definition of "beneficiaries" in the Tāmanuhiri Tūtū Poroporo Trust deed, including on behalf of beneficiaries who had not consented, to enable related entity Hinenui Whānui Charitable Trust Board to receive and utilise existing tax credits. While the trustees had made extensive efforts to gain support for the proposal from all beneficiaries, the Court agreed it was impracticable to achieve complete consensus given the beneficiary pool of almost 3,000 individuals. However, the variation approved by the Court was in more restrictive terms than that sought by the trustees, the Court finding that the broader addition proposed was unnecessary to achieve the aim of the amendment and could risk enabling trust property to be divested so as to prejudice the existing beneficiaries.

Section 133 (applications by trustees for directions about trust property, or the exercise of any trustee power).

This includes:

• Vance v Turvey [2024] NZHC 3772, where the High Court "blessed" the trustees' decision to distribute a trust's remaining assets in the face of ongoing family disputes.
• Huang v Chen [2025] NZHC 1003, where the High Court declined to direct that the trustees be required to undertake works on a trust-owned building, in order to enable it to be used for church congregations and other meetings. This application was connected to a broader dispute, where two opposing trustee groups are each (amongst other things) seeking to have the other group removed. Pending the hearing of the substantive disputes, one trustee group considered the works should be undertaken to the trust's building, which would enable the trust to generate further income. The other trustee group considered the building should be leased, with no work undertaken. In this case, the applicant trustees surrendered their discretion to the High Court, which was then to step into the shoes of the trustees and make the decision for them. Justice Anderson noted:¹
  
  There is no doubt that the Court can make directions under s 133 in this scenario. But the test that applies is not whether there is a seriously arguable case that a reasonable trustee would exercise his or her powers in the way proposed by the plaintiffs. Rather, it is a substantive question. The Court will act as a reasonable trustee could be expected to act having regard to all the material circumstances.
  
  Her Honour declined to make the directions sought, on the basis she did not have sufficient evidence to enable her to properly weigh the alternative proposal put forward by the defendants (that the property be leased). Given the church's poor financial position, the judge considered that a prudent trustee could only authorise the works required for the expanded use of the building following consideration of information as to the ability to otherwise obtain revenue from the building.
• McKean v McKean Family Trustee Limited [2025] NZHC 1621,² where, in the context of proceedings regarding a range of allegations against a former trustee and its director (none of which were upheld), and substantial acrimony between family members, the trustee sought directions "blessing" resolutions enabling trust property to be sold, and bringing forward the trust's vesting date. When a beneficiary of the trust proposed that different directions be made, his standing to do so was challenged. The High Court blessed the resolutions made by the trustee. Justice Radich did not consider it would be appropriate to consider the alternative directions proposed by the beneficiary given the trustee had been clear it was not surrendering its discretion, though was hesitant to conclude that the Court did not have jurisdiction to order the alternative directions at all. Justice Radich observed that, had the trustee invited the Court to make alternative orders, in the event it was not prepared to make its proposed directions, there would have been nothing stopping the beneficiary from proposing alternatives.
• Re Bennie [2025] NZHC 1916, where the High Court directed that the trustee and executor of an estate was able to sell certain trust assets and invest the proceeds for the benefit of the beneficiaries, in circumstances where the terms of the deceased's will (which created the testamentary trust) were unclear as to whether this was permissible.
• Price v Price [2025] NZHC 1061, where the High Court exercised its jurisdiction to give directions regarding trust property, in circumstances where the trustees were deadlocked, or disabled by a conflict of interest. Four years prior, the Family Court had released a decision dividing the property of former couple Lesley Price and Andrew Price under the Property (Relationships) Act 1976. To give effect to that division, certain transactions were required, including the transfer of shares held in a trust into a new trust, settled for the benefit of Lesley and the former couple's children. Andrew Price, including in his capacity as a trustee, had not taken the necessary steps. The High Court made a number of orders to give effect to the Family Court judgment, including directing the trustees to transfer the shares to the new trust within a specified time frame, and ordering that, if Andrew failed to comply with that direction, the High Court registrar was nominated, pursuant the Senior Courts Act 2016, to execute any documents necessary to give effect to the transfer.

Section 133 applications in particular are increasingly being seen as a key protective tool for trustees who are considering a significant step in the management of the trust, and a means by which the guidance of the court can be sought in circumstances where the appropriate steps may be unclear.

Another decision to touch upon such applications this year came from the Māori Land Court. In Cairns-Williamsen v Hakaraia - Waihaha 4 (2025) 500 Aotea MB 280 (500 AOT 280), Judge Warren ordered that the results of a trustee election be set aside, on the basis that a proxy form verification process was invalid. The election was required to be re-run. To ensure that the fresh election would run smoothly, the judge directed that the trustees file a section 133 application on how to manage the proxy form process.³  In making those orders, the Judge noted: ⁴

As a final comment, I note for the benefit of this trust and other trustees of Part 12 trusts, that seeking direction of the court when in doubt or when trustees seek to depart from the clear provisions of their trust order are part and parcel of being a responsible trustee. […] At the very least legal advice should be acquired.

If one compares the costs (time and money) of getting legal advice and/or direction of the court, and the costs that are now incurred by having a contested court hearing and the rerunning of an election, it hopefully illustrates the point I am making.

Other trends in trust law

In the past twelve months we have also seen parties seeking to refer their trust disputes to alternative dispute resolution (particularly mediation or arbitration) with greater frequency, and at a much earlier stage in the dispute. In our view, this is connected to the increased use of section 145 in the courts (power of the court to submit certain trust disputes to an alternative dispute resolution process), which is giving parties greater confidence to propose alternative dispute resolution, knowing that court orders can be sought if the other party will not participate voluntarily.

More generally, trust law disputes have continued to increase, as control of trusts with now substantial assets continue to pass to the next generation. At the same time, we are seeing an escalation in trust restructuring work as families seek to redesign the structures in which their assets are held – both to ensure they remain fit for purpose, and to reduce the risk of becoming embroiled in their own dispute in future.

Recent Supreme Court decisions

As summarised in our Private Client Review updates over the course of the year, in the past twelve months New Zealand's Supreme Court has delivered a number of important decisions in the private client space, including:

• A v D [2024] NZSC 161, in which the Court declined to extend the principles of fiduciary duty or trust law to enable the children of an abusive father to unwind his transfer of assets out of their reach. See our summary.
• Cooper v Pinney [2024] NZSC 181, where the Court clarified the circumstances in which the rights or powers found in a family trust deed may constitute relationship property for the purposes of the Property (Relationships) Act 1976. See our summary.
• Legler v Formannoij [2024] NZSC 173, in which the Court's majority found that a trustee's purpose, in exercising her power of appointment to appoint a company of which she was the sole director as the sole trustee, before removing all other beneficiaries and distributing the trust property to herself, was not improper. See our summary.
• Lassnig v Zhou [2025] NZSC 116, in which the Court dismissed an appeal against Zhou v Lassnig [2024] NZCA 177, a case we considered in our 2024 Year in Review publication. The Supreme Court concluded that the Court of Appeal had erred in its approach to the inquiry under s 182 of the Family Proceedings Act 1980 (including by failing to give sufficient weight to the parties' longer-term expectations as to the benefits that might have been obtained from the trust assets, had the marriage continued), it agreed with the outcome reached, and confirmed that the Court of Appeal's orders stand.
• Alalääkkölä v Palmer [2025] NZSC 9, in which the Court ruled that copyright in an art work is capable of constituting relationship property under the Property (Relationships) Act 1976. See our summary.
• Maka v Toailoa [2025] NZSC 149, in which the Court dismissed an application by trustees for leave to appeal. The decision relates to Beddoe orders, which the lower courts made in favour of the applicants in the substantive proceeding (a former pastor of the Samoan Independent Seventh Day Adventist Church, and two members of its trust board) who are seeking, amongst other things, removal and replacement of trustees, and amendments to trust constitutions to ensure their proper administration in future, in the context of serious concerns regarding the operation and management of two charitable trusts. See our more detailed summary of this case.

Tax update: law changes for new migrants, charities review and Labour's capital gains tax

A recent tax Bill introduced in August proposes a raft of changes in the tax system, including the rules applying to foreign equity investments held by new migrants, employee share/option plan rules, a new "non-resident visitor" regime for so-called "digital nomads", and the repeal of onerous trust disclosure requirements.

 

We made submissions to the Finance and Expenditure Committee on the Bill's proposals, with an aim to improve certainty, reduce taxpayer compliance costs and ensure the rules operate cohesively alongside existing tax legislation. You can read more about our submissions here.

In February, Inland Revenue launched an issues paper considering whether certain tax concessions available to charities and the not-for-profit sector continue to be effective. The issues paper considers whether the business income tax exemption for charities remains appropriate and whether tax concessions should apply to private foundations or "donor-controlled charities". Inland Revenue received over 800 submissions on the issues paper and the review of the tax rules applicable to this sector will continue into 2026. 

With an eye to the 2026 general election, the Labour Party has announced that it will campaign on a forward‑looking "capital gains tax".

The tax would apply at a flat 28% rate on gains from the sale of commercial and residential investment property (excluding the family home), with effect only for gains accruing after 1 July 2027. Labour proposes to exclude most classes of capital assets from the scope of the tax (including family homes, Kiwisaver, business assets, shares and all other personal property), and to ringfence capital losses only against future capital gains.

The technical details of these design features – and others that the policy does not consider – will almost certainly be complex, but it is unclear how much detail will be released before the election. We expect this to be a hotly-contested campaign issue and will be following these developments closely.

Immigration update – new immigrations settings with Active Investor Plus Visa and Business Investor Visa

Active Investor Plus Visa

The Active Investor Plus (AIP) Visa was refreshed in April 2025 to better incentivise experienced, skilled investors to invest in New Zealand.

The AIP system now has two simplified investment categories:

• the Growth category: a minimum investment of NZ$5 million for a minimum period of three years, in acceptable higher-risk investments (including direct investments in New Zealand businesses); or
• the Balanced category: a minimum investment of NZ$10 million for a minimum period of five years, in acceptable mixed investments, with the option to include lower risk investments.

Other changes to the AIP system included broadening the scope of acceptable investments, removing the English language requirement and fewer immigration requirements for more active investments. Applicants must meet character and health criteria, and also spend the minimum time in New Zealand as required by the investment category.

The Government's desire to increase the number of potential investors seeking New Zealand residence has been successful, with Immigration New Zealand reporting in November 2025 that 416 applications for 1,335 applicants had been received under the new AIP Visa settings. This number was up from 116 applications received in two and a half years under the previous settings. As at 10 November 2025, Immigration New Zealand has approved 86 applications, with the majority of investments being made into Invest New Zealand's approved managed funds, and bonds.

Business Investor Visa

The Government's review of immigration settings continued, with the announcement of the Business Investor Visa (BIV) in August 2025.

The BIV is aimed at attracting experienced businesspeople to invest in and actively manage established businesses in New Zealand. This visa replaced the Entrepreneur Work Visa, which had relatively low uptake.

The BIV offers two investment pathways:

• a NZ$1 million investment in an existing business, leading to a three-year work-to-residence pathway; or
• a NZ$2 million investment in an existing business, offering a fast-tracked 12-month pathway to residence.

Applicants must either purchase a business outright or acquire at least 25% ownership of a business, while meeting other criteria including possessing relevant business experience and proof of NZ$500,000 in personal support funds. The visa also excludes investment in certain business types such as gambling, tobacco, fast food and home-based operations. Applications for the BIV will open on 24 November 2025.

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This content is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter, please contact a Russell McVeagh partner/solicitor.

About out Private Client team

Russell McVeagh's expert Private Client team provides strategic advice on all areas of personal wealth, family succession and philanthropy. We act for individuals, family offices, corporates, trustees and iwi, and specialise in both "front end" work – establishing and managing asset ownership structures – and contentious matters. We also have market-leading expertise in tax and immigration, and are able to draw on the capabilities of the broader firm, including property, corporate and environmental and planning, when needed.