The changes were recommended by tax expert John Shewan, appointed by the government to review existing legislation following the release of the Panama Papers.

The papers revealed details of hundreds of thousands of foreign trusts around the world, and New Zealand was mentioned numerous times.

More than 11,000 have been set up in New Zealand.

Foreign trusts are legal but they can be used to hide wealth from tax authorities and to launder money.

Mr Shewan concluded New Zealand wasn’t a tax haven but its rules were light-handed and needed strengthening.