Annachy

Apologies if this has been asked before but I'm new and can't find anything relevant in the threads so far! Has anybody on here got experience of spending their time in the UK and NZ more or less equally? Say, 7/8 months in NZ and 4/5 months in UK. My husband and I have NZ permanent residency and are UK citizens. We currently live in the UK but want to move back to NZ, but as our grown-up children live in the UK we'll want to come back and visit. Our income would come from both UK and NZ investments so we're just wondering how tax would work as from what I've been researching it might be a nightmare! Any insights gratefully received.

LittleGreyCat

I will watch this with interest, as we MAY get the chance to live in NZ and would have to stay for 6 months+ for the first 2 years.
Which country you are taxed in would be interesting.
Also having a home in the UK but not being tax resident might have implications for Capital Gains Tax should one sell.
We are holding off on detailed questions until we know if we will get the visa.

Pulaski

You cannot be tax-resident in two countries, or at least you seriously don't want to be. Realistically, and this question does come up from time to time, though not in the context of UK & NZ that I recall, but you need to decide which country you will be spending most of your time in, and then plan around that.

Factors include not only tax but also things like health insurance, medical treatment, and prescriptions, and the related matter of travel insurance. By being a resident of one country but only a visitor in the other will significantly simplify your tax situation, though you will still likely have to pay some tax in each country, on your income arising in that country, but you should check with a tax professional to be sure that you are paying the tax you are liable for, but not overpaying, but be sure to explain which country you will be living in most of the time, and in which country you will be a visitor/ spending a minority of the time.

LittleGreyCat

I wasn't expecting to be tax resident in both countries at the same time.

I was speculating on the impact on Capital Gains Tax if one became tax resident in NZ whilst still owning a property in the UK.

If we keep a UK property but live in NZ for more than 6 moths a year the choice of where to be tax resident could be "interesting".

Pulaski

Well with CGT on a home in the UK, you're liable for CGT in the UK whether or not you're tax resident in the UK. There may, or may not, be additional CGT due in NZ, or I suspect more likely, if you're selling your home in the UK, no CGT due in the UK, but CGT due in NZ.

LittleGreyCat

You are not liable for CGT in the UK on your main residence.
Otherwise we would all be paying a fortune each time we moved house.
Last time I looked at this it was quite complicated.
However CGT on a major asset is not to be sniffed at.

Pulaski

True, (I know, I'm British and old enough to have owned a house in the UK before I left, and sold for quite a tidy, tax free profit ) but you may be liable if you've moved out of it, and the time window for avoiding CGT entirely after moving out is now quite short. .... Please excuse me, most people are asking about CGT after a one way move, not back and forth every few months.

Bo-Jangles

You definitely need professional advise on tax as it no doubt will become complex if you have income from both countries. You don't get a choice on tax residency, you become resident for purposes of tax if you are in either country for 183 days or more within a twelve month period. Those 183 days do not necessarily need to be consecutive. There's also another test in NZ around permanent place of abode which you can find here - looking at the criteria it seems that it might be difficult to prove which country is actually 'home' if you are doing 50/50

I think it's highly likely that you will start to think twice about the practicality and affordabilty of maintaining two homes and travelling back and forth on a regular basis. There's many here, myself included, who thought we would be able to flit back and forth more regularly. The cost of flying from here can be prohibitive and I need at least five years to recover from the previous journey, before I can contemplate getting on a plane again.

Pollyana

And even more than that, what if you find yourself trapped on one side of the world or the other, with half of your "life" unavailable for months or even years? It was a factor in my final decision to leave Australia. Borders were closed firmly and swiftly only a couple of years ago, and it could easily happen again, now governments realise how easy it is.- which is even harder to deal with than the simple physical and financial cost of constantly moving countries.

LittleGreyCat

The heart of the issue is that we want to be able to live in UK or NZ in the future as residents.
If we were to sell up in the UK then we are in a lottery for which housing market moves in which direction.

Noting that Annachy, the OP, hasn't mentioned if they intend to keep a house in the UK as well as NZ.

In our case all our income will come from the UK because we are pensioners.

Annachy

The plan is for NZ to be our home, with trips to the UK definitely as 'visits'. We'll definitely be getting professional advice re tax as with income potentially coming from both countries we a) don't want to be stung for tax twice, and b) don't want to run foul of either HMRC or the IRD! It might be easier (if we can) to move our investments to NZ and try and cut financial ties with the UK entirely. We will be selling our home before we move back to NZ so we won't be maintaining two homes. It would just be nice to hear from anybody who's maybe attempted this way of living, even if they tried it and decided it wasn't for them.

Justcol

Off topic a little but maybe relevant to LGC.
IF you are in effect resident in one county and only a visitor in the other, are you still eligible for full access to all health services in both countries.
I know of a pensioner who went back to the UK for a holiday and was hit with a bill for hospital treatment.
Can you still be registered for a GP in the UK if you're not resident there

tht

You can be tax resident in more than one country. You have to look at each countries individual rules/test separately (one apply does kit mean others can’t /won’t)… NZ and UK is much better than UK and US because there is no state/city tax for which you won’t get a credit. The 183 days is one thing, but not the only test. Selling the home etc will help. Also consider domicile and domicile of origin.

One other helpful “tool” can be vacations… days you are not in NZ or the UK… plenty of places on the way to stop for a few days or a week or 2 to help with day count…. And while visiting the UK, a trip to Europe to break up your stay in the UK may be something to consider…

I kept a very detailed spreadsheet/model when I was in a similar situation for 3-4 years… the key is to forecast / plan your days and then update with what actually happens. The other complication is how days are counted, back in 2010 at least I think the US counted midnights as a day, while the UK did not count the day you arrived or left… and Ireland had a different rule, it basically meant you could end up not counting a day or it counting in 2 different counties towards their total…

the NZ PR and IRRV is so much better for this setup than the US LPR… I still have mine and can show up anytime and become a PR… OP you may want to see if getting NZ Citizenship would be a good idea though… with something like another CVxx it may have benefits for travel…

Pollyana

No. You can only be registered for NHS treatment f you are resident in the UK.

There are cases where people have managed to get treatment of various kinds without paying for it - often staff are unaware of the rues, but technically you ned to be resident. You can use the NKS as soon as you become resident again, but they may ask for proof of address etc.

tdrinker

Double taxation treaties should ensure the same income isn't taxed twice, but you definitely need professional tax advice to avoid any potential "traps". But you don't want to let the tail wag the dog, tax is something to be aware of but it's unlikely to be a limiting factor. And as others have stated there are other considerations, including medical coverage and the security and maintenance of your NZ home when you are away, especially if you're absent for a continuous 4-5 month period annually.

As NZ is your primary home, you have to decide which periods to spend in the UK. A block of a few months in summer may be most appealing weather wise, avoiding the winters in both countries. But you may wish to make several shorter trips, involving additional expense on flights and the strain of long haul flights - the flight itself and the jet lag at each end. A downside to a single trip is that it means spending a long block of time away from the comfort of your own home, which you've set up to suit you. This may or may not be an inconvenience, depending on your personality ("set in your ways") and type (and cost) of temporary accommodation you book.