New Zealand’s tax system doesn’t tax on inheritance tax, healthcare or capital gains tax. The Labour party may start proposing an inheritance tax in the future, although there are no clear signs as of yet as it is a tough topic for debate and is something that needs to be backed by facts and research before anything is proposed.
It’s important to research the effects of imposing a tax especially when it comes to the distribution of wealth. The problem with the lack of inheritance tax is the fact that a lot of wealth will remain in a few wealthy families. Although if a tax law was to be put in place, there would need to be discussion about whether the average family passing down what they can to their children would be under the same rules.
In the past, any discussion of an inheritance tax was to be met with fierce rejection but nowadays views are changing – at least with Australia. New Zealand may closely follow. Two thirds of interviewed Australians were in favour of introducing taxes to estates worth more than $3m.
Many countries have these taxes so New Zealand may have this debate in the future. Some view inheritance tax policies as something imposed from envy of the wealthy or believe it is a noble thing to work hard to be able to pass everything fully to their children. There are heavy debates for both sides of the inheritance and death tax topic.
The reason why there has been talk about the New Zealand inheritance tax is because of a $5 million budget for Inland Revenue to research high-wealth New Zealanders and the tax they are paying. Although for now it has been reiterated that there won’t be any new taxes this term, it could be something that is being looked into or researched for at least future decisions on New Zealand’s tax system.