TaxBlog

Nation-wide advertising begins this week in a campaign to block Government plans for “an inheritance tax in disguise”.

Advertisements have been scheduled in major newspapers by the New Zealand Trustees Association seeking support from trustees, beneficiaries, and professional advisers for the association’s drive to oppose an increase in the family trust tax rate.

The Trustees Association represents registered and professional trustees, administrators, trust companies and professional advisors.

Association Executive Officer Errol Anderson said the Inland Revenue Department planned to raise family trust tax to 36% while lowering the company rate to 30%.

“This is an inheritance tax in disguise which will hit families hard,” he said.

“It is unacceptable for the rich, along with companies, to get a tax break at the expense of family trusts.

“More than 244,000 trusts are registered with the IRD. Most of them are family trusts where the minor beneficiaries ‹ children ‹ are already paying a corporate tax rate of 33%.

“Under this proposal, those children will pay more tax than companies and large corporate bodies.”

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There is an excellent article on both sides of the estate tax in the Boston globe. Even though NZ has not had estate taxes for some time, other countries are still debating the best way to deal with them.

Interestingly the Death Tax? In 2009, only estates worth more than $3.5 million (or $7 million for a couple) would be taxed. That’s three out of every 1,000 estates. After exemptions and deductions, the effective tax rate on average is estimated to be 17 percent.

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