Plain language law

New Zealand law explained for everyone

 Plain Language Law homepage
Back to
EW 2: Relationship of financial arrangements rules with other provisions
or “Financial arrangement rules take priority over other rules unless stated otherwise”
You could also call this:

“A financial arrangement is an agreement to receive or pay money now or in the future”

A financial arrangement is a way of handling money that involves certain conditions. You are part of a financial arrangement when you get money now, but you or someone else has to give money back later. This can happen in two ways:

  1. You agree to give the money back at a set time in the future.
  2. You agree to give the money back if something specific happens or doesn’t happen in the future. This could depend on whether someone tells you about it or not.

There are other things that count as financial arrangements too. These include:

  • When you owe money to someone, even if it’s because of a law.
  • When you have a document that shows you owe money.
  • When you agree to pay for something later, after someone has given you their rights to money from another financial arrangement.
  • When you agree to pay for being released from your duties in another financial arrangement.

Sometimes, things that weren’t financial arrangements before can become financial arrangements. This can happen in special cases described in sections EW 7 and EW 8 of the law. When this happens, the rules for financial arrangements start to apply to those things too.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

Next up: EW 4: What is not a financial arrangement?

or “Items not considered financial arrangements include giving away rights and being released from obligations”
Next

Part E Timing and quantifying rules
Financial arrangements rules

EW 3What is a financial arrangement?

  1. Financial arrangement means an arrangement described in any of subsections (2) to (4).

  2. A financial arrangement is an arrangement under which a person receives money in consideration for that person, or another person, providing money to any person—

  3. at a future time; or
    1. on the occurrence or non-occurrence of a future event, whether or not the event occurs because notice is given or not given.

      1. Without limiting subsection (2), each of the following is a financial arrangement:

      2. a debt, including a debt that arises by law:
        1. a debt instrument:
          1. the deferral of the payment of some or all of the consideration for an absolute assignment of some or all of a person’s rights under another financial arrangement or under an excepted financial arrangement:
            1. the deferral of the payment of some or all of the consideration for a legal defeasance releasing a person from some or all of their obligations under another financial arrangement or under an excepted financial arrangement.

              1. For sections EW 7 and EW 8,—

              2. an excepted financial arrangement that ceases to be an excepted financial arrangement through the operation of section EW 7 is a financial arrangement:
                1. an excepted financial arrangement that ceases to be an excepted financial arrangement for a party through the operation of section EW 8 is a financial arrangement for the party.

                  Compare
                  Notes
                  • Section EW 3 list of defined terms notice: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).