Articles: Trusts and Asset Protection Articles
"The end of gift duty? Let's not be too hasty..." - by Miles Agmen-Smith
© Copyright ASCO Legal 2013
You have probably heard that gift duty was recently abolished. This was a form of tax, administered by the Inland Revenue, under the Estate & Gift Duties Act 1968.
Is this a signal for mass gifting? A careful checking of the law and the policy shows that the answer is in fact, "it depends". The reason for this is that, unfortunately, it is not all plain sailing in many situations.
The Ministry of Social Development administers a different law, the Social Security Act 1964. Part of this Act deals with whether or not the State will fund the cost of long-term residential care in hospital or in a rest home for each individual. Under that Act, the Ministry can decide if a person has "deprived" themselves of any income or property (or other assets) and it has discretion in that case to decide that when assessing the person's financial position, the income or assets concerned are to be treated as if that person still owned them. What this means is that today's gifting decision can permanently affect your entitlement to State-funded care at a time far into the future.
The good news is that this is where we can help. We understand the complicated gifting provisions and can advise you whether a gifting programme is right for you. So contact us to discuss today.