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Deposit Takers Act 2023

Depositor compensation scheme - Entitlement to compensation - Entitlement rules

210: Protected deposit held under different trusts

You could also call this:

"Protected deposits in multiple trusts are treated separately for compensation."

Illustration for Deposit Takers Act 2023

If you have a protected deposit that is held under different trusts, you need to treat each part of the deposit separately. This means that when you are working out how much compensation you are entitled to for each trust, you look at the amount of the deposit that belongs to each trust. You do this at the time the amounts are quantified, which is when the amounts are worked out. This helps to make sure that each trust is treated fairly.

When you are calculating the compensation for each trust, you do not include the amounts that belong to the other trusts. However, there is an exception to this rule, which applies to certain trusts mentioned in section 209(1)(b)(i) and (ii). This exception means that the rule about treating each part of the deposit separately does not apply to those trusts.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS543831.

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Part 6Depositor compensation scheme
Entitlement to compensation: Entitlement rules

210Protected deposit held under different trusts

  1. If a protected deposit is held under different trusts, each portion of the deposit held under each of those trusts as at the quantification time must be treated as being a separate protected deposit for the purposes of calculating the entitlement to compensation in respect of each trust.

    Example

    A deposit of $150,000 is held for 2 trusts: the Smith Family Trust and the Jones Family Trust. Of that amount, $90,000 is identified as being property of the Smith Family Trust while $60,000 is identified as being property of the Jones Family Trust. Those amounts must be treated as separate deposits for the purposes of calculating entitlements to compensation for the respective trusts.

  2. This section does not apply to a trust referred to in section 209(1)(b)(i) and (ii).