gifting to family member for their support is not dutiable actually as long as its not considered excessive.
but you're pushing it because its not really for their support unless you let them spend the interest.
a family trust doesnt solve the problem (much) either as the kids under 16 would have to pay trustee rates of tax (currently 33%)
Gifts exempt from gift duty
These types of gifts are not subject to gift duty:
– small gifts, up to $2,000 total value to any one
recipient in one calendar year, as long as they are
part of the giver’s normal expenses
– gifts for support and education of relatives
(provided these gifts are not excessive)
here are the links to read re gift duty if you wish to study up on it yourself
http://www.ird.govt.nz/resources/1/c...4a30/ir194.pdf
http://www.ird.govt.nz/resources/4/5...4a30/ir195.pdf
this is the sort of wording you're facing up to re the legislation on avoidance
Tax avoidance arrangement means an arrangement, whether entered into by the person affected by the
arrangement or by another person, that directly or indirectly -
(2) Has tax avoidance as its purpose or effect; or
(2) Has tax avoidance as one of its purposes or effects, whether or not any other purpose or effect is
referable to ordinary business or family dealings, if the purpose or effect is not merely
incidental:
...
Tax avoidance in sections BG 1, EH 1, [EH 42,] GB 1, and GC 12, includes -
(2) Directly or indirectly altering the incidence of any income tax:
(2) Directly or indirectly relieving any person from liability to pay income tax:
(c) Directly or indirectly avoiding, reducing, or postponing any liability to income tax:
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