We ask the general public to see if they think Kiwi Saver is enough to survive.
More kiwis have died wealthy, leaving a great legacy thanks to the wealth and the soaring value of wealth.
These intergenerational storms escape primarily from tax collectors, but the government
Avoid the “coming disaster” when the baby boomer generation retires.
A Treasury spokesman said the taxation of inheritance tax was not discussed, but the long-term fiscal position consultation plan, which will be announced on Tuesday, states that many countries will tax large-scale inheritance tax or inheritance tax. He said.
“These often carry significant tax exemption and integrity risks, which raise the issue of fairness for the affected people, but their economic costs can be relatively low.”
Other OECD countries are using taxes to raise GDP from 0.1% to 0.7%, the report said.
New Zealand’s share of GDP spent on health and aging is projected to reach 18.2 percent by 2061, with people over the age of 65 expected to make up more than a quarter of the population.
Expenditure will increase from $ 39.7 billion to $ 268.9 billion.
Dr. Jonathan Barrett, associate professor of commercial law and tax at Victoria University of Wellington, said gifts and inheritances in excess of a small amount should be based on income tax law.
Barrett supported the capital transfer tax, but said the inheritance tax was politically unpopular.
“New Zealand technically does not tax capital at the national level, but if it is comprehensive, some of the amount in income is treated as capital. [capital gains tax].. This means that they are disproportionately dependent on a narrow range of taxes such as GST and personal and corporate income taxes. “
For most people, wealth was determined by their home. “As baby boomers begin to leave property to their children, the gap in wealth inequality can widen,” he said.
He said the Irish model could also work in New Zealand. The capital acquisition tax supplemented by the discretionary trust tax is expected to be levied on the beneficiary at approximately 33 percent, not the property of the deceased.
Mark Lister, head of private wealth research at Craigs Investment Partners, said the elephants in the room are heading for a future where the government is not in a position to pay aging to everyone.
He said the presumed tax shortage was, in his view, an “approaching disaster.”
“The numbers are pretty scary … Simply put, older people will collect taxes more than young people. This isn’t a new issue, but it’s not the winner of the vote, so I’ll fix it. Is a difficult problem. “
Raising the eligibility age of supermarkets and applying asset tests and means tests were political hot potato options. Alternatively, you can readjust the tax system.
He said the problem with inheritance tax is that the structure often leaves loopholes.
“People who can afford it can have very smart lawyers and accountants teach them how to get out of them.
“There will be many kiwis that aren’t particularly wealthy, but are actually sitting on fairly large nest eggs in the form of homes, farms, or companies.
He said low interest rates had increased the value of all assets, including art collections, antiques and classic cars.
“So some people want some very high inheritance.”
Glenys Talivai, CEO of Public Trust, said he had distributed $ 615 million to real estate beneficiaries during the 2021 fiscal year.
Anecdotally, public trusts saw an increase in real estate value due to an increase in asset value.
“Our Tauranga Customer Center team is increasingly seeing scenarios where older people die. They lived modestly in aging alone, so they may leave little cash, but their homes Worth about $ 1 million. “
Most inheritance went to the deceased’s spouse or child.
Simon Anderson, managing director of Realty Group Ltd, which runs Eves and Bayleys, said rising wealth in rural, commercial and residential properties has increased people’s wealth.
He said more parents are using their own homes to take their children home as early inheritances.
“From my own situation, I know that the trust of our family assigns some of that trust to the family before the trust ends. As long as you have cash flow, you Can do it … and I think it hasn’t changed over the years, parents who can help their children. “
Anderson said the money for health care and aging had to come from somewhere-property or income-but that wasn’t an easy solution.
The figures in the Ministry of Social Development’s annual report show that retirement pension eligibility surged from $ 14.5 billion in 2018/19 to $ 15.5 billion in 2019/20.
Retirement Commissioner Jane Wrightson of Te Ala Ahunga Ola said the NZ Super has existed since 1938 and there is no reason not to set it up for future generations.
The increase in GDP spending on NZ Super will be offset by a drawdown from the NZ Super Fund.
“Additional spending on the system will, of course, cause debate about raising the eligibility age, means testing, or introducing other tax reforms.”
She said there was no easy solution and the proposed changes required detailed analysis.
“You run the risk of penalizing or discouraging people no matter how you look at it.
“The important thing is to have a stable framework that enables trust and trust in the system. Older people in New Zealand now and in the future need to live with dignity and mana.”
Heritage written in Tauranga’s will
• Make sure that the ashes of a dead pet are buried in your ashes when you die.
• Give a vinyl record collection and a DJ mixing table.
• We will continue to inherit the Japanese silk kimono that has been passed down from generation to generation.
• Give you a choice of firearms and hunting knives.
• Pass a collection of power tools.
-Source Public Trust
Why do you need a will?
• Over 50% of adult New Zealanders do not have a will.
• People over the age of 18 with assets over $ 15,000 must be willing (Kiwi Saver’s average balance is currently $ 17,000)
• Having a will is an important part of your financial planning that goes beyond the distribution of assets and will help you remember it the way you want and get your loved ones to your fans and friends.
• Will creates certainty about how you want to divide your property when you die and to whom it should be passed.
• If you die without a valid will, it is called a will death. Basically, your property is divided according to management law.
-Source: Public Trust
Should inheritance be taxed to offset the bulge of the baby boomer generation?Expert weighted
Source Should inheritance be taxed to offset the bulge of the baby boomer generation?Expert weighted