Trustees Executors, the trust company owned by Sterling Grace Corp, reached an agreement to pay about $4.9 million following an Inland Revenue Department audit of its 2013 tax year and the treatment of a $24m legal settlement, its accounts show.

The firm hasn't disclosed the source of the settlement, which it recorded as other income in the year ended September 30, 2013. That same year it paid $25.6m, or $7.97 a share in dividends, more than five times more than its 2012 payment of $4.6m, or $1.44 a share. The tax debt was treated as a contingent liability in its 2015 year.

Trustees Executors paid tax of $2.6m in 2013 on profit of $33.6m, a tax rate of just 7.7 per cent. In its 2016 year it paid tax of $8.4m on profit of $12.5m, including the $4.9m for 2013.

The firm has had numerous court battles since Sterling Grace acquired what was then known as Tower Trust in 2003, including actions against Perpetual Trust, Fund Managers Canterbury and the Official Assignee. The business was a listed company on the New Zealand stock exchange before being acquired by National Insurance Company in 1970. It became a subsidiary of Tower Corp in 1988 and was renamed Tower Trust New Zealand in April 1999 after Tower was demutualised.

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Revenue in its latest year rose 5.2 per cent to $38.4m, of which the bulk was commission and fees.