Bayly AndrewANDREW BAYLY (National—Hunua): It is a pleasure to be talking on this bill tonight. Just before we start I think it is worthwhile going back and just reminding ourselves of what this bill is actually about. It is actually about four things. First of all it is about making tax processes simpler and my good colleague here Alastair Scott just spoke about that. Secondly it is about implementing the automatic exchange of prudential accounting information on tax matters. Thirdly it is about ensuring that stage 1 of the Business Transformation Programme for the IRD can be put in place. The fourth one which we have had quite a bit of debate about is around the Government Inquiry into Foreign Trust Disclosure Rules.I just want to pick up on that last one but the reason I am just highlighting those four issues—we have heard about the brightline test from our good colleague from across the way here. To be honest that is a very very small part. It has come into this bill only through a Supplementary Order Paper. This is nothing really to do with the four key elements of this bill so the brightline test conversation is actually a bit of a sideshow.Also we have just been hearing a lot about tax structures from Dr David Clark and all that sort of information. Newsflash—I have just got to correct you Dr Clark. On 25 January New Zealand was ranked first equal as the least corrupt country in the world so if there is any sort of aspersion that New Zealand is in a bad place or whatever that is just totally not right.So just turning to the issue that Mr Robertson started out by talking about tonight which is foreign trusts the Shewan report was actually quite revealing. Contrary to a lot of the rhetoric that we have heard tonight the issue with New Zealand is that the system is not broken but it could be substantially improved and that is what this bill is about. It is not broken but we can improve it and this is what we are doing.I heard members saying Oh we're not going far enough." and all that sort of stuff. I thought we might just have a conversation around some of the detail of that. So the details that we discussed in the Finance and Expenditure Committee—first of all the definition of a foreign trust. I am sure everyone knows this but it is a trust that is settled by a foreigner. So the first amendment is that we require resident trustees to formally register. Previously that actually was not required. Previously it was not required; now they are required to do it.Secondly we require foreign trusts as part of a registration to declare that the person establishing the trust has made sure that the trustee the settlor or the protector has actually understood what they are signing up to. The rules and the laws that they have to be made aware of are the Tax Administration Act 1994 the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 the regulations under the Anti-Money Laundering and Countering Financing of Terrorism Act etc. So all those things they are specifically now required to actually be informed of and to actually sign off on.The third thing that they have to do is that—we have substantially increased the disclosure regime around when you register a trust. So that is all contained in new section 59B in clause 10 and it is interesting just looking at the level of detail we now require. We actually now require the name and other identity of the particulars of the trust; the date and detail of each settlement of the trust; the email address the residential address the country of tax residence and the tax identification number—and I will come back to that—for the following persons: each settlor each person with a power under the trust to control or dismiss a trustee or appoint a new trustee and each person with a power under the trust to control a trustee. Those two categories are actually defined as a protector. For each trustee we require all that information and for a fixed trust we require it for each beneficiary and nominee for the underlying beneficiary.So those are the quite significant requirements required when you register a trust. When you look then in terms of the annual filing stuff now—that has also been beefed up quite substantially under new section 59D. The specific changes are that during the 12-month period if there has been any change in terms of information provided as part of the registration the trust's financial statements the date and nature of each settlement the name email address residential address country of tax residence tax identification number the date and time of each distribution the name and email—"