Home > Updates > Gifting – your frequently asked questions
Clients regularly ask questions about gifting – everything from Christmas gifts for staff through to financial help for family. To help you navigate this popular subject our Business Services Senior Manager, Nicola Pollard and Simpson Western North’s Partner, Sarah Martin teamed up to answer some frequently asked questions.
No. But there are other factors to take into consideration before you make any gifts. For example, if you may need to claim residential care subsidies in future, some gifts can be clawed back and added to your total assets. These rules are complicated so ensure you get some advice in this area. You will need legal documents to be drawn up, including a certificate of solvency to certify that the gift does not leave you financially insolvent.
No, but some donations to approved organisations may qualify for refundable donation tax credits when paid by an individual.
Yes, but consider carefully whether it should be a gift or a loan. There can be unintended consequences if you get it wrong. The required legal documentation should be prepared and legal advice sought beforehand. Carefully consider whether you are leaving yourself enough money for the rest of your life. Be wary of unequal treatment between children to avoid disputes.
Watch relationship property issues with children’s partners. There is protection for inherited funds in some circumstances, but not for gifted funds, and if your child puts the gifted funds into the family home, the gifted funds will likely become relationship property unless you or your child takes steps to protect them. Ensure you get robust legal advice.
Yes, you can gift any property but carefully consider why. Sometimes the motive behind the gift may not achieve what you want it to. A lawyer is required to arrange transfer of title and prepare the required documentation. Refer to our comments above re. residential care subsidies and relationship property.
You can gift to anyone. If you step outside that category, while you can still make a gift, there could be consequences for either you or the person you gift to. Make sure you get some advice around this.
Yes you can. However, be careful of breaching tax rules (for example the bright-line test in respect to residential property) or ‘re-setting clocks’ in respect to other property. Something to be wary of is that sometimes gifts can be clawed back – especially if the gift was done to defeat the rights of creditors. Likewise, gifts that defeat relationship property rights can be overturned, or remedies can be granted to an aggrieved party. Legal documents need to be prepared.
If you would like to discuss any of the issues outlined above, please get in touch with your Nexia New Zealand or Simpson Western North advisor.
If you are not already a Nexia client, please reach out to our Auckland, Hawke’s Bay or Christchurch office. Connect with a Nexia Advisor to discuss how we can help.
Thanks to Sarah Martin from Simpson Western North for sharing her expertise.