Wanganui Rivercity Press Article
Christine Savage is a Senior Accounting Technician within our business advisory team.
If you have a particular subject you would like Christine to cover in an article contact her on csavage@silks.co.nz or
ring her on 06 345 8539.
Have you been making the maximum gift of $27,000 a year? From 1 October 2011 you can gift any amount to any person and not have to pay gift duty to the IRD.
Should you now take the opportunity to gift the total amount owing post 1 October 2011?
Our advise is to be careful. Play it safe and continue to record all gifts by a deed as we believe all gifts should still be validated by supporting documentation.
During September consider why you are gifting off the debt and how will a one off gift impact on your asset protection and ultimately you personally. Has the debt been used as a way of giving you effective control of the Trust and will this be lost if the debt is extinguished?
A one off forgiveness of debt will not have any added advantages in terms of entitlement to rest home subsidies or other WINZ benefits. WINZ has their own rules which allow and will claw-back all but their annual gifting allowance of $6,000 pa for the previous five years into their calculations.
Please do not make any hasty decisions and take advice if you think there are benefits of clearing the debt all in one go. On the other hand do not leave the debt clearing for too long. This is a great time for everyone to review their gifting programme.
Published - 6 September 2011
