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Income Tax Act 2007

Taxation of certain entities - Trusts

HC 4: Corpus of trust

You could also call this:

"The 'corpus of trust' refers to the total value of property given to a trust."

Illustration for Income Tax Act 2007

When you hear the term corpus of trust, it refers to the value of property settled on a trust. The value is determined by the market value of the property at the time it was settled. You can find more information about how settlements are treated in section HC 3. The corpus of a trust does not include the value of certain property settlements. These include settlements that would be income for the beneficiary or the settlor if they were distributed. The corpus is calculated based on the settlement value of the property. This value is the market value of the property when it was settled on the trust. The total value of all settlements is used to calculate the corpus, unless the settlements are treated differently under section HC 3.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517257.

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HC 3: Multiple settlements, or

"How trustees can manage multiple contributions to a trust as one entity"

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"How trustees categorise income they receive or are deemed to receive"

Part HTaxation 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, if the property were distributed to a beneficiary of the other trust, and the beneficiary was resident in New Zealand, the distribution would be beneficiary income or a taxable distribution to that beneficiary.

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

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

      5. 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(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).