Tax Facts: Gifting

A gift is something given when:

• Nothing is received in return; or
• Something is received in return, but its value is less than the value of the property given.

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If something of lesser value is given in return for a gift, the value of the gift is the difference between the two values.
In the context of trusts, these items can all be gifts:

• Transfers of any items (for example, company shares or land).
• Any form of payment.
• Creation of a trust.
• A forgiveness or reduction of debt.
• Allowing a debt to remain outstanding so that it can't be collected by normal legal action.

If you propose to make a gift to a trust, please contact us to discuss the implications.  It is important to take into consideration what the trust, and the gifts to the trust are designed to achieve as part of a long-term strategy.

The government abolished gift duty for dispositions of property made on or after 1 October 2011.  This means that:

• Gift duty will not be payable for dispositions of property made on or after 1 October 2011
• Gift statements will not need to be filed for dispositions of property made on or after 1 October 2011
• However, gift duty and gift statements will remain due for dispositions of property made prior to 1 October 2011

For gift duty on any gifts made before 1 October 2011, the IRD's guide on the IRD  website is helpful.

Please be aware that there is a $6,000 annual gifting limit for rest home subsidy purposes.

For more information on gifting please give us a call.

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