The foreign trust industry has responded with shock to the threat of the Government moving to remove its tax-free status and is gearing up for a lobbying effort it concedes will be an uphill battle.
Cone Marshall principal Geoffrey Cone, understood to be the country's largest foreign trust provider, said last weeks' tax announcement had come as a shock.
"We knew it was under discussion, but I don't think anybody really expected it to happen ... It's pretty disconcerting for there to be a complete reversal of policy without a great deal of consultation."
Robin Oliver, a former deputy commissioner of policy at Inland Revenue and founder of tax advisory firm Oliver Shaw, was blunt in describing the likely impact of the move on the trust sector.
"This effectively closes the industry down," he said.
The pair were critical of the move - coming so soon after the wide-ranging Shewan Review had overhauled disclosure in the sector - and Cone said there would be representations made to officials and politicians after the September 23 election.
"Politicians are presently too busy trying to get elected - there's no point in having that discussion now."
But he was pragmatic about their chances: "I'm not sure how much we can do. We'll do our best, but it does seem a bit hopeless."
The Government's move is a marked change in course, with the sector having weathered two storms in the past few years, only to see the heavens open after it believed it had reached a safe harbour.
The taxing question of foreign trusts was first raised in 2014, when Inland Revenue officials flagged a review of the tax-free status of our trust regime.
This process was cut short after a lobbying effort fronted by trust administrator Kenneth Whitney, a personal adviser to then-Prime Minister John Key, who invoked his clients' name in organising meetings with then-Revenue Minister Todd McClay.
Several months after trust industry representatives met McClay, the review was quietly dropped.
The industry then found itself in the public spotlight following the Panama Papers affair, when a leaked cache of documents showed how the internationally mobile used structures - including New Zealand foreign trusts - for dubious ends, including tax evasion and money laundering.
That triggered the Shewan Review which, while not looking specifically at tax, recommended a broad range of measures including requiring foreign trusts to register and provide details of settlors and beneficiaries to Inland Revenue in order to share this with other tax authorities.
These changes, requiring registration by June 30 this year, had already dramatically pruned the sector. The latest figures from Inland Revenue show 3300 trusts have registered under the new regime, with 3200 signalling they'll exit.
At its peak - just before the Panama Papers saga broke - it was estimated there had been 11,750 trusts in existence.
Cone said his own clientele were more willing to work with the new system and "around 80 per cent" of his trusts had opted in, and the moves had culled the shadier end of the industry.
"I'm sure there were a pile of odds and sods who were taking advantage of the system - and I'm very glad they've been wound up and gone somewhere else," he said.
Both Cone and Oliver said the disclosure rules had effectively dealt with the possibility of trusts arbitraging tax laws to effectively operate tax-free, making the latest moves - to impose New Zealand tax if trusts aren't paying it elsewhere - heavy-handed and unnecessary.
Inland Revenue policy documents describe this sequence - spending a year reforming the sector and establishing a new reporting regime, before suddenly gutting it - as "unfortunate timing".
Oliver said he was at a loss about where the impetus for the moves came from. "We went through the Shewan report - and the industry didn't like part of that because compliance was onerous. Shewan said tax settings were correct, but we need more information. The Government accepted the Shewan Report last year, but seems to reject it now."
According to documents released last week alongside the announcements, there was only one public submitter in favour of the Government's move to impose New Zealand tax on foreign trusts.
That support, from tax commentator and former adviser at Inland Revenue Andrea Black, came in the form of a single paragraph on the issue. "To otherwise exclude foreign trusts from these proposals would only make sense in terms of an unprincipled concession to the foreign trust industry," she wrote.
Oliver was reluctant to finger ministers behind the policy - "I don't know how much Cabinet thought this through," he said. He instead blamed "officials" within Inland Revenue.
And despite representing a dramatic change in direction by Government, and probably spelling the end of New Zealand's cottage trust industry, the move has been largely unexplained and unheralded.
Press statements accompanying last weeks' tax announcement by Revenue Minister Judith Collins did not highlight the trust changes, and the Minister declined a Herald request this week to discuss the issue.
In a statement issued by a spokeswoman, Collins denied the move was to address problems - which the Government has previously denied existed - in the sector.
"This is not about New Zealand collecting extra revenue, or any indication of concerns with foreign trusts generally - it is about aligning our rules with other jurisdictions to target BEPS [base erosion and profit shifting] in a globally coordinated way," the statement said.
The statement said the foreign trust industry - in 2014 estimated to employ 300 people and generate annual fees of $24 million - had been cut a little slack, with implementation set for April Fool's Day in 2019 to "allow the affected parties some time to assess their options".
Cone, speaking from Greece on a work trip, joking weighed his own options. "Well, I used to do a bit of conveyancing."