1 Nov 2010

Gift duty to go

9:09 pm on 1 November 2010

The Government plans to scrap gift duty, saying it is no longer raising enough revenue.

Currently, tax has to be paid on gifts with a combined value of more than $27,000 a year. But gifts with a lower combined value of more than $12,000 must also be declared.

Revenue Minister Peter Dunne says the need to file those returns is resulting in high compliance costs, estimated to be $70 million a year - far more than the $1.5 million in annual revenue from gift duty.

Mr Dunne says the tax, which was introduced in 1985, has outlived its usefulness and will be abolished in October next year.

Legislation will be introduced this month.