Gift Duty Rule Changes
Gift Duty Rule Changes – An Introduction
– Article originally published in the Marlborough Express for Grey Power –
Hello, I am Steve Riley the Principal of Lundons Law in Blenheim. Lundons Law is Grey Power Marlborough’s honorary solicitor (in other words, it is a voluntary and free position).
Lundons Law has been asked to write a monthly article regarding legal issues relevant to Grey Power. I thought I would write about such things as Wills, Trusts, Estate Planning. Residential Rest Home issues, and Enduring Powers of Attorney over the coming months.
However, I understand that Grey Power’s membership ranges from 50 years plus so members will have differing needs from a legal perspective. If there are legal issues you would like me to write about please either get in touch with Grey Power, or contact me directly.
I thought I would begin by briefly discussing the abolition of gift duty which will be a topical issue for many Grey Power members who have either transferred assets to a trust or directly to family members. If you have transferred assets in this manner you will have been involved in a gifting programme wherein you have been gifting away $27,000 per annum of the debt owing back to you.
With the abolition of gift duty you will be able to gift away the balance of any debt owing back to you in one lump sum. However, if you do this and then end up in a resthome you will be liable to pay for your own care and the Government will be able to “claw back” the assets you thought you had transferred. The message here is that in order to be eligible for a rest home care subsidy you must continue your gifting programme at the rate of $27,000 per annum.
I suggest that if you are engaged in a gifting programme you contact a lawyer to discuss the implications of the abolition of gift duty further.