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Legal Questions re gift duty changes

Clarification On Gift Duty Rule Changes

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I have received a request to clarify the information I provided last month regarding the abolition of Gift Duty.

My message was that, despite the fact that Gift Duty has now been abolished, if you have a gifting programme in place you should continue with it if you wish to be eligible for a rest home care subsidy.

Someone has written in to me saying that “To say that to continue gifting at $27,000 a year is in order is at variance with WINZ’s statements that they will only recognise gifts of up to $5,000 a year and only for the last 5 years.”

I therefore need to clarify. The situation in relation to the resthome care subsidy is that in order to qualify for a subsidy you need to have completed your gifting programme at least five years prior to entering a resthome and applying for the subsidy.

If you are involved in a gifting programme you will have been gifting at the rate of $27,000 per annum to avoid paying any gift duty. Now that gift duty has been abolished you may think that you can gift off the rest of the debt owing to you. But as I said last month, if you gift more than $27,000 in any one year then you will not be eligible for a resthome subsidy.

The correspondent’s reference to the “$5,000 rule” relates to the five years immediately prior to entering a resthome. During this five year period WINZ only allows gifts up to $5,000 per annum. Outside of that 5 year period you can gift up to $27,000 per annum. I hope that clarifies the correspondent’s question.

Please note that this article is intended for general guidance only. Each person’s circumstances will be different. You should consult your own lawyer and/or WINZ in relation to your specific circumstances – or, of course, you can contact me by email (steve@lundonslaw.com) or phone (03 578 9988).