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:
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:
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 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
|
