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Gift Duty


As from 1 October 2011 Gift Duty has been abolished. This may provide further reasons to establish a trust. 

You still need to think carefully about whether or not to gift to your trust. Some issues to consider are:
  • Would the gift result in creating an insolvent disposition?
  • Should you leave some debt owing by the trust in order to receive repayments easier?
  • Are the trust Acknowledgments of Debt up to date and in line with the Financial Statements?
It has now been established that any gifts greater than $27,000 per year will result in the loss of rest home subsides if required at any time in the future.

It was originally thought that this would only be in relation to the 5 year claw back period, however regulation 9B of the Social Security (long term residential care) Regulation 2005 deemed any gifting exceeding $27,000 in any 12 month period can be treated as a deprivation of property (including periods outside the 5 year gifting period).


Up until 1 October 2011 the Gift Duty rates were as follows:



Gifts

Value of Gift
Duty Payable

0 to $27,000
NIL

$27,001 to $36,000
5% of value over $27,000

$36,001 to $54,000
$450 plus 10% of value over $36,000

$54,001 to $72,000
$2,250 plus 20% of value over $54,000

Over $72,000
$5,850 plus 25% of value over $72,000

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