Many people are still not aware that gift duty was abolished in New Zealand effective from 1 October 2011.

This means that you can gift the balance of the debt due from your trust to you without attracting any gift duty.  Previously you can only gift up to $27,000.00 per year “duty free”.

There may be reasons why you do not wish to gift the entire balance.  For example, as a beneficiary of the trust, you may want to be able to draw money out from the trust from time to time in reduction of any debt due, without the need for any distribution.

You should also be aware of other issues affecting any gifting such as creditor protection or matrimonial property laws.   For older clients, the level of gifting can affect eligibility for WINZ subsidies for residential care.

You should still record any gift that you make to your trust by deed as there is no consideration involved.  However there is now no need to file gift statements with the Inland Revenue Department as they no longer have any interest in gifts or their quantum.