Sunday, January 23, 2011

ZenTiger National promoting larger families

"They will now be able to transfer their property portfolio to their children. If, for example, a person earning $150,000 also earns a net $42,000 from their property portfolio and receives this personally, they pay $14,000 in tax on it (33 percent).

"But if they transfer this to their three children, the children then each have an income of $14,000 which is only taxed at 10.5 percent," Phil Goff said. "That means the total tax paid is $4410. That is a tax cut by stealth of $10,000 in this case."

Goff was blabbing on about the scrapping of Gift duty, and his example was rather useless, as the same scenario could be repeated in other ways under the old system.

So I think the main message is that National seem to be encouraging bigger families according to Goff. Three minimum. Well, that's nice.

PS: I think it is illegal to arrange your affairs so as to make tax avoidance the main reason for a transaction, so be careful following Goff's advice.

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