At the Hubbis Wealth Planning & Structuring Forum – Singapore 2026, Dr Irina M. Francken, Director at IN Fiduciary Services, and Derrick Kew, Director, Tax and Advisory at CA Practice PAC, presented a practical cross-border case study on New Zealand Foreign Trusts for families with Singapore-resident beneficiaries.

Their presentation focused on a real family situation involving European wealth, a Swiss investment portfolio, a New Zealand Foreign Trust, a New Zealand corporate trustee and a next-generation beneficiary resident in Singapore. The discussion combined succession planning, jurisdictional selection and Singapore tax analysis.

The central message was that investment management alone does not solve succession. International families need structures that can preserve wealth, support governance, reduce cross-border friction and remain tax-efficient when distributions are eventually made to the next generation.

Key Takeaways


Investment Portfolios Alone Do Not Resolve Succession Issues: Dr Irina explained that while investment portfolios are essential for wealth management, personal ownership may leave families exposed to probate, succession disputes, creditor claims and cross-border complications.
Governance Is The Missing Piece: The family required more than an investment portfolio. It needed a governance structure capable of preserving wealth and supporting succession across generations.
New Zealand Was Chosen For Its Stability And Reputation: The jurisdiction combines political stability, a common law legal system, an independent judiciary, OECD and CRS compliance, and a modern trust framework that is well recognised internationally.
A New Zealand Foreign Trust Can Be Tax Neutral In New Zealand: Where the settlor is not a New Zealand tax resident, the trust holds no New Zealand-sourced assets or income, and the beneficiaries are non-residents, foreign-sourced income is generally outside the New Zealand tax base.
The Structure Was Designed Around The Family’s Objectives: The case involved family wealth being held through a New Zealand Foreign Trust with a New Zealand corporate trustee, an offshore investment portfolio managed by a Swiss private bank, and a Singapore-resident beneficiary.
Singapore Tax Analysis Begins With The Trust: Derrick explained that the first step is to understand the nature of the trust and the character of the distribution before considering the Singapore tax treatment of the beneficiary.
The Discretionary Nature Of The Trust Is Important: As the beneficiary had no fixed entitlement to trust income, the trustee retained full discretion over distributions, which is an important consideration in the overall tax analysis.
The Character Of A Distribution Matters: Depending on the underlying facts, a distribution may represent capital rather than income, making it essential to analyse the nature of the distribution before reaching any tax conclusions.
Different Structures Serve Different Purposes: New Zealand Foreign Trusts, Singapore Family Offices and Singapore Trusts are complementary tools. Each has its own strengths and should be selected according to the family’s objectives rather than viewed as interchangeable solutions.
Good Governance And Documentation Are Essential: Successful international trust structures rely on genuine trustee independence, robust governance, clear source-of-wealth documentation, and ongoing compliance with the relevant legal and tax requirements.

 

A Cross-Border Family Case

Dr Irina opened with the client situation. Seventeen years earlier, a European couple had approached her Singapore office while selling a business in Europe. The sale proceeds formed an investment portfolio with a Swiss private bank, while their only daughter had completed university in Europe and begun her career in Singapore.

The family wanted to plan for succession. One option was to leave the Swiss investment portfolio in personal ownership. But Dr Irina said that would not address the deeper risks: probate, possible family disputes, remarriage or new partners after the death of one parent, creditor exposure and the complications created by multiple jurisdictions.

“Investment management does not resolve the problem of succession in a smooth way,” she said.

The planning objective was therefore to create a structure that could hold wealth, support governance and remain flexible as family circumstances changed. For this family, that ultimately led to a New Zealand Foreign Trust with a corporate trustee, Swiss-managed assets and a Singapore-resident beneficiary.

Why New Zealand Was Selected

Dr Irina said the jurisdictional question was central. Singapore, Hong Kong and Labuan could all have been considered, but the family wanted a long-term succession structure rather than a financial-centre solution alone.

New Zealand appealed because of its reputation as a politically stable, common law jurisdiction with a strong legal and judicial system. It is also OECD and CRS compliant, which made it familiar and acceptable to private banks, particularly in Europe and Switzerland.

For Dr Irina, modern New Zealand trust law was a key advantage. It allows the trustee meaningful powers and flexibility, including the ability to address certain trust deed, beneficiary and administrative matters without routinely going to court.

“That flexibility is what I am talking about when we talk about succession planning,” she said.

She also stressed what New Zealand is not. It has not positioned itself as a wealth management hub in the same way as Singapore or Hong Kong. For a New Zealand Foreign Trust, the assets must sit outside New Zealand, which can suit international families whose investment portfolios are already held elsewhere.

Tax Neutrality In New Zealand

The New Zealand tax position was described as an important part of the structure, but not the only reason for it.

Dr Irina explained that a New Zealand Foreign Trust generally requires a non-New Zealand settlor, trust assets outside New Zealand and non-New Zealand-resident beneficiaries. In that situation, foreign-sourced trust income is generally outside the New Zealand tax base.

For this family, that meant the Swiss investment portfolio could remain outside New Zealand while the trust provided the legal and governance framework for succession.

The tax neutrality was therefore aligned with the structure’s purpose: preserving wealth for a Singapore-resident next-generation beneficiary while avoiding unnecessary tax leakage in New Zealand.

The Singapore Tax Position

Derrick then addressed the question likely to matter most to Singapore-based advisers: if the Singapore-resident beneficiary receives a distribution from the New Zealand Foreign Trust, is it taxable in Singapore?

He said the analysis should begin with the trust mechanics, not with a search for exemptions. Under Singapore’s Income Tax Act, trust income is generally treated as the statutory income of the trustee and taxed, if at all, at trustee level. In this case, the trustee was a New Zealand corporate trustee, not a Singapore tax resident, and the trust derived no Singapore-sourced income.

On that basis, Singapore had no taxing right at trustee level, and distributions made out of that trust income could be treated as capital in the hands of the Singapore-resident beneficiary.

“The starting point is the trustee, not the beneficiary,” Derrick said. “Where the trustee is non-resident and there is no Singapore-sourced income, Singapore has nothing to tax at that level — so what reaches the beneficiary is capital, not income.”

He then addressed the alternative route: whether Singapore might tax the beneficiary directly through a transparency approach. That would generally require the beneficiary to have a fixed, unconditional entitlement to the income.

This trust was discretionary. The beneficiary had no fixed entitlement until the trustee exercised its discretion.

“There is no transparency, no annual attribution to the beneficiary,” Derrick said.

He added that the character of the underlying wealth also supported the analysis. The assets derived from the historical sale and unwinding of a European business group, giving the wealth a capital character from the outset. If a transparency argument were ever raised, foreign-sourced income exemptions for Singapore-resident individuals could also become relevant, but Derrick framed that as a safety net rather than the main basis for the position.

Matching The Tool To The Family

Derrick said the wider lesson is that structures should not be treated as competitors.

A New Zealand Foreign Trust may be suitable for mobile families with offshore wealth, non-Singapore and non-New Zealand assets, and a strong succession or asset protection objective. A Singapore Family Office may be more appropriate where the family wants an onshore investment platform with Singapore substance, but that comes with heavier regulatory, compliance and administrative requirements. A Singapore Trust can be useful where the family wants a local trustee and Singapore-law trust architecture.

“The purpose dictates the tool,” Derrick said.

That point was reinforced by recent developments in Singapore. Derrick noted that family office compliance expectations are increasing, including more detailed annual filing and declaration requirements. For families whose real need is succession and offshore wealth preservation, a lighter trust structure may sometimes be more suitable than a Singapore Family Office.

But he warned against leaving the room with a template. The facts matter, especially residency, source of wealth, entitlement, trustee management and the way the structure is administered.

Substance Must Support The Position

The final message was cautionary.

Derrick said the integrity of the tax position depends on how the structure is managed. If control and management drift back to Singapore, if the trust is treated like a personal bank account, or if documentation does not support the commercial and succession purpose, the ground beneath the analysis weakens.

He highlighted four points that need to be right: the deed must be discretionary in substance, the beneficiary’s Singapore tax residency must be genuine, the source of wealth must be clean and traceable, and trustee substance must remain real in New Zealand.

Section 33 of the Singapore Income Tax Act, which addresses tax avoidance, was also flagged as an important guardrail. A structure built for family succession and properly supported should be in a stronger position than one created only to avoid tax.

The conclusion was therefore practical. New Zealand Foreign Trusts can offer jurisdictional strength, governance flexibility and tax efficiency for the right cross-border family, but only where the structure matches the facts and is operated properly.

For advisers, the lesson is to begin with the family’s objective, then choose the structure that can support it across jurisdictions, generations and future tax change.