Gift duty to be abolished

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The Revenue Minister Peter Dunne today confirmed by media statement that gift duty will be abolished.

The legislation abolishing gift duty will be passed this month and will take effect from 1 October 2011.

The Government has assessed the impact of the repeal of gift duty on income tax, creditor protection and social assistance and found that gift duty only offered minimal and incidental protection for the areas and did not justify the $70 million of ...

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No gift duty is payable on gifts to charities

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Generally if you give someone a substantial gift you will have to pay gift duty.  However, if you make a gift to a charity you do not have to pay gift duty.

For example, a society (XYZ Society Incorporated) can transfer land to a charity (XYZ Trust) for free without paying gift duty. The society could then lease the land back from the charity.  Doing this adds an extra barrier of protection for the assets.  Call me on 09 470 2445 ...

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Income tax “associated persons rules” in relation to land transactions

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In my Blog on trusts tainted by new associated persons rules I discussed one of the outcomes of the amendment to the “associated persons” rules in the Income Tax Act 2007. The main consequence of the amendment is that a person who is a dealer, developer or builder will “taint” persons he or she is associated with. That means you may be deemed to be a land developer if you are associated ...

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Gift duty to be repealed – making gifting to your trust free!

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The Government is considering repealing gift duty. Gift duty is a tax that you must pay when you give away more than $27,000 worth of property in one year. This may be by cash, forgiving a debt, transferring a house or other property to your trust. The original purpose of gift duty was stop people getting around the estate duty rules. The estate duty rules were abolished in 1992. Gift duty was retained to stop people giving away large assets ...

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GST rate increase from 1 October 2010

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The GST rate is probably increasing from 12.5% to 15%. We should know for sure by this Thursday (20 May 2010) when the Government announces the Budget. The increase is likely to be effective from 1 October 2010.

The GST rate increase could not come at a worse time. We are still suffering from the recession. Businesses do not want to lose any profit so will add GST to their base price; making the total price higher. That means the Government ...

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Trusts tainted by new associated persons rules

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Legislation has been passed amending the definition of “associated persons” in the Income Tax Act 2007. Trustees are now associated with a trust if they hold the power to appoint or remove trustees. One of the consequences is that a trustee who is a dealer, developer or builder will “taint” the trust with that status (and vice versa). Once tainted, income tax may be payable on the sale of property that was acquired after becoming tainted.

In particular, your independent trustee ...

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