2 Nov 2010

Abolition of gift duty welcomed

4:56 pm on 2 November 2010

The Government's decision to abolish gift duty has been widely welcomed.

The tax, introduced in 1885, restricts gifts, mainly to trusts, to $27,000 a year.

It was designed as a way of stopping people from hiding money in trusts in order to thwart creditors or qualify for state help such as subsidised aged care or legal aid.

But Revenue Minister Peter Dunne says there are better ways of doing this than taxing gifts.

The Institute of Chartered Accountants agrees. So does the Law Society.

PricewaterhouseCoopers chairman John Shewan says there is enough protection against misuse, saying the state has enormous powers to inquire into people's finances.

Federated Farmers also welcomes the change, which it has been seeking for more than 42 years. The federation says it will help smooth farm succession and save farmers time and money.

The law comes into effect next October.