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.
| If you are providing gifts that have a combined value of ... | then you ... |
|---|---|
| $12,000 or more in a 12-month period | must complete a Gift duty statement (IR196) and send it to us. |
| $27,000 or more in a 12-month period | are liable to pay gift duty. |
Gift duty is not payable on gifts made on or after 1 October 2011.
Find out more about non-profit organisations, or
Read our Gift duty (IR194) guide
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 trusts and estates, or
Read our Trusts and estates income tax rules (IR288) guide
Change of address or phone number
You can change your address and phone number online, or
contact us on 0800 227 774 to advise us of your new details.
Date published: 30 Aug 2011
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