For individuals & families: When you retire

Paying gift duty and setting up trusts when you retire

If you are providing gifts or setting up a trust when you are retired, there are tax issues you need to be aware of.

Paying gift duty

For gift duty purposes, a gift is something you give where you receive nothing in return, or you receive something in return with a value that is less than the value of the property you gave.

A gift includes:

• transferring any items of property (for example, company shares or land)
• making any form of payment
• creating a trust
• forgiving or reducing a debt, and
• allowing a debt to remain outstanding so that it can't be collected through normal legal action.

Find out more about not for profit groups or read our Gift duty (IR194) booklet - go to "Forms and guides".

Setting up a trust

You can set up a trust by giving money or property to another person (the trustee). The trustee administers the trust and holds the money or property for the person or people who are to benefit from it (beneficiaries), for example, your children or grandchildren. Gift duty may apply to the money or property you originally provide for the trust.

Usually a trust earns income through investments, or funding business ventures. Tax is paid on this income at a flat rate of 33 cents in the dollar.

Find out more about not for profit groups or read our Trusts and estates income tax rules (IR288) booklet - go to "Forms and guides".

Change of address or phone number

If these have changed, please contact us so we can update your details, and keep you up to date with information that may affect you. Go to "Get it done online" >"Changed your address and phone number?" or "Forms and guides" to use our Have you changed your name, address or phone number ? (IR238) form.

Other pages in: When you retire

• Tax on your income when you retire
• Working for families tax credits and child support when you retire
• Nominate someone to act on your behalf

Date published: 09 Jun 2009

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