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There is no Death tax

Discussion in 'Off-Topic' started by vonork, Aug 30, 2004.

  1. Stapel

    Stapel FIAT 850 coupé

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    Well, the point is: can you (alive or dead) donate money to your children, without your kids being taxed. If you hire your son or daughter into your own company, he or she should pay tax. If you hire your son or daughter to do basically nothing (you just give them money), they still have to pay tax.

    If you donate money to your kids a week before you die, they still have to pay tax. Should that change if you actually are dead?

    And: should there be different taxation rules when the one who pays you is a parent?
    Maybe an exception is fair, when the kids are still dependent on daddy's monye?

    Just soem thoughts, before we jump to conclusions.
     
  2. ainwood

    ainwood Consultant. Administrator

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    Yes?

    Maybe I missed your point. :( I was simply responding to Hitro (although looks like I missed his point too). Besides - In NZ it is actually Death DUTY. Inheritances are not treated as income, so the person doesn't pay this as income tax either.

    Well firstly, I grew-up in a drought-prone farming region, where my father worked probably 70 hours a week, my mother worked as well so that we could afford to live, and my siblings and I did our bit as well. Hardly 'privileged', certainly by New Zealand standards.

    Secondly, the context of my response was to rebut:
    I don't even know what 'patologizing' means (assume you mean something along the lines of 'mocking'?), but to me this suggestion screamed of looking to punish someone simply because they are rich. Ie - an emotive argument rather than one based on fairness or logic.

    Actually, the Hilton empire is the fruit of the Hilton's labour. If he built it up by taking risks and opportunities, why should he be punished? Simply because he doesn't do manual labour? His empire provides jobs for 1000's, pays a fortune in taxes. What's the problem with that? Should anybody who is rich be treated differently from other people just because they are not blue collar workers? In short - they are exactly the same.

    Well, that's your choice. <shrug>
     
  3. ainwood

    ainwood Consultant. Administrator

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    Well, I guess this is where tax law differs from country to country. In NZ, there are no inheritance taxes nor gift duties. In all cases it doesn't matter - the money can be given before death or after death with no tax to pay. Presumably this is because when you earn money you are taxed, when you earn interest on it, that interest is also taxed. So why get taxed again when you pass it on to someone else?
     
  4. vonork

    vonork Emperor

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    Well, becouse I hire you, but don't pay you any salary, I GIVE you money. No tax :)

    Se a problem with that?
     
  5. ainwood

    ainwood Consultant. Administrator

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    In NZ, there is a test to see if anyone is actually an employee. You simply cannot call someone an employee and 'give' them money without either them paying income tax, or witholding tax (eg. people employed 'directly' that aren't employees).

    In the case you specify, where does the money that you 'give' me come from? Is it from your own personal salary?
     
  6. Stapel

    Stapel FIAT 850 coupé

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    I basically agree with such a system.
    To whom can you donate gifts? Children? Other relatives? Or also to whomever you want?

    If so, employers might ask their employees to work for free, and donate them a gift afterwards......
     
  7. Stapel

    Stapel FIAT 850 coupé

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    Sorry, fot the post above :) .

    But this does leave options for tax avoiding games.

    Bonuses can be payed as gifts....
     
  8. ainwood

    ainwood Consultant. Administrator

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    Its written into the legislation that you can only gift up to $NZ 27,000 / annum, and also you can't 'gift' to employees (well you can, but that's taxed differently -> can't avoid it by this means anyway).
     

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