Gift Duty has been abolished from 1 October 2011. This means that there is no further need for gifting programmes that only forgive debts at $27,000 per year for gift duty purposes.
In addition, gift statements no longer need to be filed with the IRD. However, evidence will still be required in the form of deeds of gift which can be prepared any time from now on to extinguish any remaining amount left on your gifting programme. Remember that even if you completely forgive your loan to your trust, any creditors may still have the ability to claw back the assets transferred through the following:
Sections 204 & 205 of the Insolvency Act 2006 cancels gifts within 2 years of bankruptcy
Section 292 of the Companies Act cancels gifts within certain timeframes
Property Law Act 2007 allows the Courts to cancel gifts where there was an intention to prejudice the interest on a creditor
This illustrates that even though gifts of assets can be made immediately, they should still be made long before there is any possibility that you may run into any financial trouble. If the main objective of your trust was to avoid asset testing if you end up in aged care, then its important to note that the $27,000 per year threshold hasn't changed for this purpose. In this case, you should consider continuing gifting $27,000 (per couple, not per individual as per below) per year, just without the need for gift statements to be sent to the IRD. If the Ministry of Social Development does undertake a means assessment, section 147A of the Social Security Act 1964 and section 9B of the Social Security (Long-term residential care) Regulations 2005 means this if the "person who has applied for a means assessment, or the spouse or partner of that person" has gifted more than $27,000, then the amount gifted above would be treated as your personal asset for the purpose of that means assessment.
Disclaimer: The above article is general in nature and we recommend you seek professional advice tailored to your specific personal situation.