Gift duty in New Zealand will be no more from October 1 this year.
Parliament last night passed the Taxation (Tax Administration and Remedial Matters) Bill into law under urgency as the November 26 election looms.
Labour and the Greens held a minority view opposing the abolition of gift duty, saying there was not enough evidence to show the move would not increase the use of trusts.
But the majority view of the select committee was a Law Commission review into trust law would handle the issue of trust use, and that gift duty was not the appropriate way to handle inadequacies in trust law.
"This bill proposes to abolish gift duty from 1 October 2011. Gift duty raises the Government about NZ$1 million a year, but costs NZ$430,000 in administration, and costs the private sector an estimated NZ$70 million in compliance each year," the FEC said in its report.
14 Comments
I know lots of the comments here will be on trusts, but does anyone have comments on other implications of this?
For example, if an elderly person gets ill, could they immediately gift all their assets to their kids and avoid having their assets stripped for their health care costs?
Basically, I am interested in insights into what effects the removal of gift duty might cause (and perhaps some will be positive?)
A oneoff at 65 may be caught by WINZ - if it is over $27,000. Until this is clarified it is safer to document any gifting - and forgive it at $27,000 per year. The only thing that has changed at present is that you don't have to tell the IRD. WINZ will go back 5 years, so keep healthy.
Received from lawyers last week.
1) The abolition of gift duty is an IRD issue and has no bearing on the laws and policies of the MSD and WINZ
2) For asset testing for MSD and WINZ the Status quo will remain
Plus various examples which i wont type here.
Keep gifting at $27k per year or they can claw things back
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