Top five tax tips for British expats in New Zealand

First, and this is not always as obvious as you might think, New Zealand’s tax system is very different from that of the UK. For starters, there is no tax-free personal allowance, so every dollar of income is taxed. 

Secondly, although there is no formal capital gains tax in New Zealand, almost all capital gains are taxable in one form or another. This is particularly relevant for the taxation of investments, the rules for which are highly unusual. A key point to remember is that your taxable income can often exceed the cash receipts from dividends.

How is the % of Superannuation calculated?

We got this question from a reader

"I have tried everywhere to find how the government arrives at the amount of superannuation that is paid is it 60 or 66 percent of the average wage
(55,000) a year before or after tax? Nowhere is it stated on the web."

Thanks for your email and interesting enquiry. The relevant legislation is the New Zealand Superannuation and Retirement Income Act 2001 (copy attached).

Time to review the funding of superannuation - some facts and figures

Piggy bank with hammer poised to smash it

In recent weeks both the Retirement Commissioner and Treasury have expressed concerns about the future affordability of New Zealand Superannuation. 

Will the tax system, particularly the present tax treatment of savings, need to change to meet those future demands?

Tax fairness, like beauty, is in the eye of the beholder

As you might expect I read Simon Swallow’s article on the new regime for the taxation of foreign superannuation scheme (“FSS”) transfers/withdrawals with interest. So, do I think the new regime and Inland Revenue’s response is fair?

My short answer is “No”. My longer answer is “Mostly, no”.

There are three groups of persons affected by the rules.

Get a head start on the new tax year

This is our newsletter for March 2016 - join our mailing list to receive this in your inbox.

Hello again. With Easter just around the corner that’s a sign the 31st March tax year end is fast approaching so firstly here’s a reminder of some useful pre year actions. 

Imputation Credit Account balances 
Carry out a review of your company’s imputation credit account to ensure it is in credit. Not only can a debit balance affect the company’s ability to pay dividends but 10% imputation penalty tax on the debit balance will be payable on 20th June 2016

Transferring overseas pensions to NZ? You will be stung for tax

“Nowhere to run to, baby. Nowhere to hide. 
Got nowhere to run to, baby. Nowhere to hide.”

(Martha and The Vandellas)

The net is closing in on anyone who transferred an overseas pension scheme to New Zealand and has not yet made the relevant declaration to Inland Revenue. 

Inland Revenue turning up the heat on pension transfers

I recently wrote an update on the never-ending saga of QROPS and pension transfers.  What is now happening is Inland Revenue has now begun issuing audit letters to individuals who transferred their pension scheme from the UK to NZ but do not appear to have disclosed the transfer in their tax return for either of the 2013-2014 or 2014-2015 years.  In the examples I have seen chosen for audit the transfers took place during the year ended 31st March 2007.

All quiet on the QROPS front?

UK Pensions QROPS tax advice

Just when you thought the tax treatment of overseas pension schemes couldn’t get any more complicated, along comes “Pensions Freedom Day” and the most significant changes to British pensions in nearly a century.  

The measures introduced by the British Budget in March 2014 included removing the requirement for holders of defined contribution schemes to purchase an annuity.  Instead, from 6th April 2015 (“Pensions Freedom Day”) anyone with a defined contributions scheme could, from the age of 55, draw down on their pension funds in whichever way they wished.  

What's in a word? "Remediation", or a sly tax increase?

Oops roadsign: Source Shutterstock.

If anything should be the focus of 'Making Tax Easier' it should be the foreign investment fund (FIF) regime.

Instead, a new tax bill is set to introduce a couple of unwelcome twists to this notoriously complicated set of rules.

The FIF regime in its current iteration has been with us since 1 April 2007 and is therefore reasonably settled law.