Estate And Gift Duties Amendment Act 1982

This commentary item was published in Public Information Bulletin Volume 12, March 1983

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Estate And Gift Duties Amendment Act 1982

The Estate and Gift Duties Amendment Act 1982 gives effect to the Budget proposal to increase the dutiable estate exemption level to $350,000, and also amends the provisions of the principal Act relating to the allowance for debts in respect of a matrimonial home.

Section 1 - Short Title, Commencement and Application

Section 2 came into force on the day the Bill received the Governor-General’s assent (9 December 1982) and applies to the estates of all persons dying on or after that day.

Section 3 comes into force on 1 April 1983 and applies to the estates of all persons dying on or after that day.

Section 2 - Matrimonial Home Allowance

This section makes an amendment to the matrimonial home allowance provided by section 17A of the principal Act to reduce the allowance by the value of any debt incurred in acquiring the matrimonial home. The measure is designed to prevent an unfair advantage being gained from the matrimonial home allowance where there has been a transfer of an interest in the matrimonial home and an unsecured debt left in respect of that transfer. Previously only secured debts reduced the value of the matrimonial home allowance.

In the past duty could be avoided by a person who was aware that he was shortly to die, by entering into a series of transactions whereby he purchased the interest, of say his wife, in the family home and left the amount owing by him on purchase of that interest as an unsecured debt. The effect of this scheme was that on his death this debt was allowable in calculating his dutiable estate. In addition, a matrimonial home allowance would have been allowed for the full value of the home as the debt was unsecured and did not have to be set off against the value of the home.

Section 3 - New Schedule of Rates of Estate Duty

This section replaces the first schedule to the principal Act and increases the dutiable estate exemption from $300,000 to $350,000 in respect of the estates of persons dying on or after 1 April 1983.

The rate of duty of 40 percent remains the same.