Government Intends to Repeal Gift Duty Tax
June 11, 2010 New Zealand Taxation
The Government of New Zealand is investigating the possibility of repealing gift duty taxes, as the levies provide too little revenue for their inherent administration costs.
On June 10th Peter Dunne, Revenue Minister of New Zealand, released a statement revealing the Government’s intentions of abolishing Gift Duty Taxes. According to Peter Dunne, the Government has been investigating the issue for several months and “a strong case has emerged” for the complete repealing of the Gift Duty Tax rules.
According to Peter Dunne’s statement, Gift Duty was initially introduced to prevent individuals circumventing Estate Duty taxes. Estate Duties were subsequently abolished in 1992, although Gift Duty Taxes were retained. The Government’s latest decision to lower the trustee tax rate will serve a similar purpose in avoiding motivation to minimize tax obligations through gifting to trusts, making the measure unnecessary.
Peter Dunne revealed that the Government is currently holding consultations with various departments concerning a few remaining issues with the abolishment of Gift Duty Tax. Specifically, the issues of the undermining of creditor interest and unfair access to social assistance need to be addressed before the abolition is carried out.
Peter Dunne summarized the passage of the repeal of Gift Duties, saying “There will be further consultations over the next few months, and if gift duty is to be repealed, I intend to include it in a tax bill to be introduced in November this year.”
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