Estate and Gift Duties Amendment Act

This commentary item was published in Public Information Bulletin Volume 65, February 1972

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Introduction

This Act was assented to on 16 October 1971 and unless otherwise stated the amendments relate to the estates of persons dying on or after that date.

Valuation of Life and Widowhood Interests

Under section 2 the Commissioner's power to disregard the tables in the Second Schedule of the Act is extended to apply to the valuation of widowhood interests as well as life interests if the widow is suffering from a mortal illness.

Persons Domiciled Overseas

Section 3 applies to estates of persons dying domiciled out of New Zealand but having assets both in New Zealand and overseas. Where a beneficiary in an estate is entitled to a pecuniary legacy or other pecuniary claim, and the will does not specifically charge the legacy or claim on assets in any particular country, it will be apportioned between the dutiable estate in New Zealand and the foreign assets.

Relief for Estate Duty Paid Overseas

Section 4 provides that when calculating the relief for estate duty paid outside New Zealand the duties paid overseas are to be converted into New Zealand currency at the rate of exchange prevailing at the date of death of the deceased. This provision is retrospective to 1 January 1969.

Deferment of Estate Duty on Mining Ventures

Section 5 inserts a new section 43A in the Act. When a deceased's dutiable estate includes significant mineral or petroleum interests, and the venture has not become income producing, payment of the relevant duty may be postponed at the discretion of the Commissioner.

Gift Duty Exemption

Section 6 transfers the exemption from gift duty enacted in the Fire Services Act 1949 into the Estate and Gift Duties Act 1968. It does not alter the exemptions but ensures that all the exemptions from this duty are in the one Act.

When Gift Duty Payable

Section 7 corrects a drafting error in section 85 of the principal Act by providing that gift duty is payable on the making of a dutiable gift.

Rights of Objection

Section 8 gives administrators rights of objection to the Board of Review for the new discretions given to the Commissioner under section 5. As with section 5 it applies to the estates of all persons whether dying before or after the commencement of the principal Act.