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Corpus, distributions and taxation

journal contribution
posted on 2017-09-01, 00:00 authored by Huigenia Ostik, Mark Smith
This article explores whether transfers of value render settled assets corpus of a trust, whether the market value of those
settled assets is the operative value of the resulting corpus, and whether those settled assets when distributed to a beneficiary
are distributed tax-free because they are treated as corpus in the hands of the beneficiary. These issues are considered from
the perspective of trustees, beneficiaries and settlors. They are also discussed where a trust is resettled and where a trustee
acts in a personal capacity and as the trustee of multiple trusts. Where the assets are transferred at below market value,
market value is central to establishing both the identity of a settlor and the corpus question. The date of settlement is also
a central concept. Where a settlement or a resettlement involves debt, for example, separate settlements may be deemed to
have occurred where interest is paid at below market rate. It is therefore possible that the relevant date for the determination
of market value of the corpus upon which a settlement has been made is the date at which the last of the multiple settlements
is made.

History

Journal

New Zealand journal of taxation law and policy

Volume

23

Article number

370

Pagination

1 - 23

Publisher

Thomson Reuters

Location

Wellington, New Zealand

ISSN

1322-4417

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal; C Journal article

Copyright notice

2017, Thomson Brookers Ltd, Huigenia Ostik and Mark Bowler-Smith

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