gift duty is set to be abolished later this year. the due date is 1 october, but with all the fluffing around & the various issues to be considered, it's looking likely that there will be a delay.
i tend to assume that people know what gift duty is & how it works. but just in case you don't, basically a person can only gift $27,000 a year in cash or forgiveness of debt before a 4% duty kicks in. these days, so many people are transferring their major income-earning assets to a trust (big mistake for most people, but that's a story for another day). so the trust owes them back the value of the assets they've transferred.
this isn't helpful, especially if you want to protect your assets from resthome subsidies, spouses, creditors, people who are suing you for negligence or the like. so people gift off their loan to the trust, so they can personally become asset free and their assets are protected. gift duty has meant that they can't gift off the loan all at once, but have to do it in chunks of $27,000 if they want to avoid the duty.
the thing with trusts, though, is that people tend to manage them so badly and seem to immediately forget that assets belonging to the trust are no longer actually their own. they behave as though they still own the assets, which makes them very vulnerable to trust-busting by creditors, the IRD, and other beneficiaries. and there are a heap of cases going through the courts. so removing gift duty is not necessarily going to mean much, if your trust isn't run as a totally separate entity from yourself.
but there's one thing that has really been bothering me today about the removal of gift duty, and it relates to elder abuse. i know that some of our senior citizens are treated horrendously and can be put under enourmous pressure to part with their finances. gift duty is a actually a protection for them - it's much more difficult to force (or nag or push) them into gifting off huge chunks of their wealth when there is tax to pay. they have the protection of the law as a reason to not gift off any more than that amount.
when it comes to decisions about tax, it's disturbing that some people only look at the economic and legal implications, but not the social ones. i'd actually like to see a social impact assessment done for most major tax changes. because the effects on people's lives will often go way beyond the economic.