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HC 3: Multiple settlements
or “How trustees can manage multiple contributions to a trust as one entity”
You could also call this:

“Property settled on a trust, excluding certain types”

In the trust rules, the corpus of a trust is the value of property settled on the trust, with some exceptions. This value is called the settlement value. For a single settlement, it’s the market value of the property when it was settled. If there are multiple settlements, it’s the total of all these values if the trustee treats them as allowed by section HC 3.

Some types of property are not included in the corpus. If a trustee of another trust settles property, it’s not part of the corpus if it wasn’t first given to a New Zealand resident beneficiary of that other trust. It’s also not included if giving it to a New Zealand resident beneficiary would make it beneficiary income or a taxable distribution.

Property settlements where the settlor can claim a tax deduction are not part of the corpus. Also, if the settlement would have been the settlor’s income if they hadn’t settled it, it’s not included in the corpus. This rule applies even if the settlor wasn’t living in New Zealand when they settled the property.

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Next up: HC 5: Amounts derived by trustees

or “How trustees categorise income they receive or are deemed to receive”
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Part H Taxation of certain entities
Trusts

HC 4Corpus of trust

  1. In the trust rules, corpus for a trust means the settlement value under subsection (1B) of property settled on the trust that is not excluded by subsection (2).

  2. For property meeting the requirements of subsection (1), the value under this subsection (the settlement value) of the property settled on a trust is—

  3. the market value of the property determined at the time of the settlement of the property, for a single settlement on the trust; or
    1. the total of the amounts determined under paragraph (a) for each settlement of property, if the trustee treats the settlements in the way permitted by section HC 3.

      1. Corpus does not include an amount equal to the market value of the property settlements described in subsections (3) to (5).

      2. A property settlement by a trustee of another trust is excluded from corpus to the extent to which the property—

      3. is not first distributed to a beneficiary, resident in New Zealand, of the other trust; and
        1. if it were first distributed to a beneficiary, resident in New Zealand, of the other trust, the property would be beneficiary income or a taxable distribution to that beneficiary.

          1. A property settlement for which the settlor is allowed a deduction is excluded from corpus.

          2. A property settlement is excluded from corpus if, but for the fact of the settlement,—

          3. it would be income of the settlor; or
              1. it would fall under paragraph (a) if the settlor were resident in New Zealand at the time of the settlement.

                Compare
                • 2004 No 35 s OB 1 corpus
                Notes
                • Section HC 4(1) heading: replaced, on , by section 133 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                • Section HC 4(1): replaced, on , by section 133 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                • Section HC 4(1B) heading: inserted, on , by section 133 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                • Section HC 4(1B): inserted, on , by section 133 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                • Section HC 4(3): replaced, on , by section 87(1) (and see section 87(2) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
                • Section HC 4(5)(b): repealed (with effect on 30 June 2009), on , by section 260(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                • Section HC 4(5)(c): substituted (with effect on 30 June 2009), on , by section 260(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                • Section HC 4 list of defined terms FDP: repealed (with effect on 30 June 2009), on , by section 260(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).