Trusts

Gifting Programme

A gifting programme is a means of transferring your assets to your trust without becoming liable for a substantial sum of gift duty. It is therefore necessary to loan your trust sufficient money to enable it to purchase your assets. No money changes hands but you are left with an asset in the form of a debt owed by the trust to you which is recorded in a Deed of Debt.

How much can I gift?

You then implement a gifting programme so that this debt is forgiven over a period of years. The maximum amount you can gift free of duty in any one year is $27,000 and you can therefore reduce the debt owed to you by this sum each year. If you are a couple this means that you can gift $54,000 per year, e.g. if your home is valued at $350,000.00 and is sold to the trust each person is entitled to gift $27,000 per annum to the trust. After two years of gifting a couple can reduce that debt by $108,000 to $242,000. When an asset is sold to the trust the trust gains the benefit of any future capital gain.

The information on this web site is of a general nature only. Readers are advised to establish the applicability of information in relation to specific circumstances and not to rely solely on the information provided here.