Removal of gift duty still unclear
"People need to take a step back here," said NZ Trustees Services director Jonathon Cron, who believes there are "too many what-ifs to categorically say what is going to happen."
News of the planned abolition, as part of a wider review of the tax system, prompted speculation the current system of transferring a property into a trust - a time consuming process where $27,000 of the value of the asset is ‘gifted' to the trust each year - will be replaced with a system allowing the property to be transferred in one go.
Not only would this see an end to the approximately $280 a year charge to set up debt forgiveness but the asset would be covered by trust status protections at once.
However, Cron says that the Property Law Act does not define what constitutes a gift, and that the IRD will be able to examine on a case-by-case basis why a trust has been created and whether any transfers qualify as a deprivation of assets.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
