Pooja Mohun
Solicitor
tel:+6472620436
mailto:pooja.mohun@hobec.co.nz
Qualifications
- LLB (Hons), University of Mauritius 2016
- Graduate Diploma in Law, University of Waikato 2020
- LLM, University of Otago 2022
- Admitted to the Bar in New Zealand 2023
Contact:
- DDI: +64 7 262 0436
- M: +64 27 200 7306
- E: pooja.mohun@hobec.co.nz
Pooja is originally from Mauritius. After successfully achieving the International Cambridge School and Higher School Certificate, she completed a Bachelor of Laws with Honours (LLB) at the University of Mauritius in 2016 (based on French/English Laws).
Following, Pooja has worked in legal and compliance roles in Mauritius before moving to New Zealand in 2020.
She completed a Graduate Diploma in Law at the University of Waikato, where she obtained the “Overall Academic Excellence Award” and earned the title of “top student” in Land/Property Law for 2020.
In 2022, she graduated with a Master of Laws degree (First Class Honours) from the University of Otago. Her research focus was on the “Regulation of Artificial Intelligence in the Finance Sector”.
During her study period, Pooja had the opportunity to work in compliance roles with Craigs Investment Partners and First Mortgage Trust in New Zealand.
Pooja has a keen interest in the property and finance space. She looks forward to building on her skills within the property and commercial team at Holland Beckett Law.
Outside of work, Pooja loves travelling, exercising, and exploring new adventures.
Pooja Mohun's Expertise
Pooja Mohun's News & Resources
Incentives for a Trust in light of recent regulatory reforms
Safeguarding your Legacy
Trust structures have been a cornerstone of asset protection for centuries, particularly for those wishing to safeguard valuable assets like investment portfolios. However, the legal and tax landscape is constantly in flux. To ensure these structures remain effective, individuals seeking asset protection should follow four key steps on their informed decision-making journey:
First, it is crucial to grasp the basic concept of a Trust after the new Trusts Act 2019 which came into force on the 30th January 2021. This involves knowing how a Trust works and the roles of parties such as the settlors, trustees, and beneficiaries.
Establishing a Trust involves thoughtful steps, including choosing an independent trustee who is not a beneficiary. The independent trustee’s role is to act in the beneficiaries’ best interests, avoiding or managing any conflicts.
Understanding the purpose of the Trust is essential. This involves considering any specific needs or long-term goals for asset protection and aligning the Trust\'s structure and provisions to the desired outcomes.
Finally, ongoing administration by the chosen trustees is vital to safeguard the best interests of the beneficiaries over time. Regular reviews ensure that the Trust complies with evolving regulations and effectively fulfils its intended purpose.
Trustees
Being a trustee comes with significant responsibility, given its fiduciary position. Understanding the Trust Deed thoroughly and adhering strictly to its terms is crucial. Trustees must exercise care, diligence, and act in the best interests of beneficiaries when making investment decisions. Delegating duties is not sufficient; active participation is essential. Trustees should maintain accurate records and disclose information appropriately to beneficiaries. Additionally, addressing health and safety risks related to the Trust assets is part of their duty. Unanimous decision-making among trustees is mandatory unless the Trust Deed specifies otherwise.
Tax
Effective 1st April 2024, the tax rate for Trust income has increased from 33% to 39%, aligning with New Zealand’s top personal income tax rate. This change aims to create a more balanced system. However, there are exceptions:
Trusts earning less than $10,000 annually will maintain the old 33% tax rate.
Estates will benefit from a lower 33% tax rate in the year of death and the subsequent three years before transitioning to the new 39% rate.
Trusts specifically supporting disabled beneficiaries, energy consumers, and legacy retirement funds will continue to be taxed at the lower 33% rate.
With the recent increase in Trust tax rates, trustees have shown concerns about their ordinary actions being misconstrued as tax avoidance. To address this, Inland Revenue has issued guidance on permissible actions that, when devoid of artificial or planned elements, are unlikely to be construed as tax avoidance. These actions include:
Adjusting a Trust-owned company’s dividend pay-out policy (for example, distributing retained earnings before the new rate or reducing dividends afterward).
Directly distributing income to beneficiaries in lower tax brackets.
Incorporating companies within the Trust for asset transfers at the 28% company tax rate.
Investing in Portfolio Investment Entities (PIEs) with a 28% tax rate as a tax-efficient alternative to investments subject to the full 39% trustee tax rate.
Winding up the Trust as a valid option in all these potential scenarios.
Seeking ongoing legal, financial and tax advice in this respect is crucial.
AML
Effective 1st June 2024, New Zealand\'s Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regulations introduce stricter Trust verification procedures. The key changes affect customer due diligence (CDD) requirements. Reporting entities must now obtain and verify specific details related to trusts:
The Trust\'s legal structure and proof of existence (i.e. The Trust Deed).
Ownership and control structure (identifying who ultimately controls the Trust).
Governing powers that bind and regulate the Trust.
Identity of the settlor(s) (person who established the Trust) and protector(s) (if applicable).
It is important to note that, for AML/CFT purposes, the Trust itself is considered the \"customer\", not the individual trustees. Despite this, a Trust is legally classified as an “arrangement,” not a “person.” Consequently, CDD requirements also apply to the individuals who ultimately control the Trust—the beneficial owners. These individuals, including trustees, hold significant direct or indirect ownership or control over the Trust. While a settlor creates a Trust, they qualify as a beneficial owner only if they maintain substantial control, such as the power to appoint trustees amongst others.
Key Conclusion
Trust structures serve as powerful tools for managing wealth across generations. Generally, they offer significant advantages, including asset protection from creditors and streamlined wealth transfer to future generations. However, it is essential to weigh the costs, complexities and benefits. A thorough analysis of your specific circumstances will help determine whether a Trust remains the best approach, especially considering the changing tax landscape and increased administrative burden.
Our team at Holland Beckett specialises in estate planning and trust matters and is ready to assist you.
Construction Contracts (Retention Money) Amendment Act 2023 – ‘The Highlights’
The collapse of high-profile construction businesses such as Mainzeal and Ebert Construction and subsequent judgments dealing with the distribution/management of retentions have prompted some important legislative changes affecting the construction industry. The most recent change being amendments to the Construction Contracts Act 2002 (CCA) contained in the Construction Contracts (Retention Money) Amendment Act 2023 (“the Amendment Act”).
Scope
The Amendment Act affects retention money (commonly referred to as retentions) withheld under a commercial construction contract entered into or renewed after 5 October 2023.
Purpose
The main purpose of the Amendment Act is to provide contractors with more transparency and control over retentions held against them, and to ensure that those retentions are not intermingled with other funds of their customers, which had previously made recovery difficult if the customer became insolvent.
Retention Money Scheme
Retention money is money owed to a contractor that is held back by the customer to secure the performance of the contractor’s obligations under a construction contract. It is common for a customer to be entitled to hold back a percentage of each of the Contractor’s progress payment claims which accumulates as retentions.
In 2017, an earlier amendment to the CCA introduced mandatory rules contained in a then-new Part 2A of the CCA that determined how retentions are required to be held, accounted for and used by the party retaining them. However, deficiencies in these rules were highlighted in the context of liquidation proceedings and related cases following from the collapse of Ebert Construction in 2018. In particular, although the intention that retention money would be held “on trust” and that accounting records must be kept by the party holding those retentions was clear, it was less clear that retention money had to be held in a segregated account or what the consequences were if retention money was not held and accounted for with in the correct manner.
New Requirements
The Amendment Act clarifies and supplements the previous provisions in the CCA regarding retention money. In particular:
the party who is entitled to withhold retentions is deemed to hold that money on trust from the point in time that it becomes entitled to withhold them (ie. the portion of a payment claim that is able to be held as a retention must be held on trust whether or not the balance of a payment claim is actually paid to the contractor);
retention money must be segregated from other funds, for example in a trust account or escrow arrangement with a third party. This is to avoid retentions being intermingled with other funds of the customer; and
accounting records, including a ledger for each retentions account, must be kept by the party holding retention money;
contractors are entitled to certain information about their retention account including in what type of account, and with whom, the retentions are kept and ledger records;
continuity of the trust applying to retention money in the event of a liquidation or receivership of the customer is expressly provided for;
MBIE is given powers to enquire into and enforce compliance with the retentions rules directly; and
new penalties for non-compliance are introduced including fines of up to $50,000 for a director and up to $200,000 for a company.
Next Steps
Our construction law experts at Holland Beckett can assist people who intend to withhold retention money under a construction contract to ensure they comply with the above requirements and to advise contractors on their rights and remedies in relation to retentions held against them.