By Tara Grant - 25 Aug 2011
On 1 October 2011 gift duty will be abolished
If you have a trust or are thinking of setting one up, you will
be particularly interested in this law change.
It means you will be able to give away assets, of any value, to
a trust without incurring gift duty.
But does this mean you should?
Assessing your personal circumstances and your family's
circumstances is essential before you decide about gifting. There
is no "one size fits all" approach.
Before you answer, consider this:
- Have you given any personal guarantees? Will you still be
solvent if you make the gift?
- Could you be the subject of a relationship property claim? Is
the asset to be gifted your own separate property or is it
relationship property?
- Might you want to apply for a government subsidy? Do you
understand the current policy relating to this?
- Do you want to remain a creditor of the trust so that you have
additional rights to the trust's assets over and above the other
beneficiaries?
- Are you subject to any current creditor or IRD claims?
It's a personal decision
The ability to gift, without being restricted to $27,000 per
year, will be a welcome change to the law for many. But you should
take your time over the decision to gift and consider the
implications carefully.
At Martelli McKegg, we're here to help you make the right
decision. As the 1 October date draws closer, your main contact
will be in touch to offer personalised advice.
If there are matters you would like to discuss sooner, please
contact Tara
Hurley.