As of 1st of October 2011 gift duty been abolished by IRD in New Zealand. If you have a Family Trust this will have significant implications for you.
It has been standard practice in New Zealand for people to sell assets to their trust and have a debt back to themselves. Every year they would forgive $27,000 (the maximum amount without incurring gift duties prior to this recent change) this meant that if a couple owned a house worth $520,000 it would take 10 years of gifting $27,000 each to forgive the entire debt. Each year they would have to see their lawyers or accountant, complete paperwork and pay for the gifting to be done. Under the new regulations this gifting regime will no longer be neccesary - it is now possible to give an asset directly to the trust with no debt back as their is no longer any gift duty payable. This is great news for those of you with trusts as you will be able to gift one lump sum and will no longer have the hassle and expense of on going gifting.
If you are a trustee of a trust you should be aware however that in some circumstances it may be appropriate to still loan money to the trust and have a debt back to yourself rather than to gift the entire amount. When deciding whether or not to forgive the debt from your trust you need to get proper advice take into account certain factors including:
For those of you wanting more information CCH has published a useful guide - Abolition of Gift duty - options and risks