New Tax on non-NZ personal & occupation pension plans to hit migrants old and new
#1
New Tax on non-NZ personal & occupation pension plans to hit migrants old and new
New Tax proposals have been put forward which will penalise new migrants. The proposals suggest taxing UK Pensions if you are outside of the 4 year transitional resident period. This includes the 25% Tax Free withdrawal at retirement!!
If you have been in NZ for more than 4 years, and have either transferred your pension to NZ or still have your private pension in the UK, this is a must read. There is the full proposal and a Fact Sheet at this link.
It is proposed that from the 2011/12 year:
•tax would be payable when a person receives a pension or lump sum, or transfers a lump sum to another scheme (rather than on an annual basis)
•periodic pensions would continue to be taxed as they currently are
•a portion of any lump sum amount would be taxed depending on the length of time between when a person arrived in New Zealand and when they withdraw or transfer their lump sum.
Submissions on the proposals should be made by the 3rd of September.
If you have been in NZ for more than 4 years, and have either transferred your pension to NZ or still have your private pension in the UK, this is a must read. There is the full proposal and a Fact Sheet at this link.
It is proposed that from the 2011/12 year:
•tax would be payable when a person receives a pension or lump sum, or transfers a lump sum to another scheme (rather than on an annual basis)
•periodic pensions would continue to be taxed as they currently are
•a portion of any lump sum amount would be taxed depending on the length of time between when a person arrived in New Zealand and when they withdraw or transfer their lump sum.
Submissions on the proposals should be made by the 3rd of September.
#2
Re: New Tax to hit migrants
UUmm.
So. If you have moved what was your pension funds into NZ ( via qrops) and have invested in PIE's etc as advised by said , will you then be hit by tax or will the PIE investments remain under the NZ taxation rules for this.
Seems somewhat harsh as it sounds like a tax simply because you are a migrant , no matter how long you have lived here.
So. If you have moved what was your pension funds into NZ ( via qrops) and have invested in PIE's etc as advised by said , will you then be hit by tax or will the PIE investments remain under the NZ taxation rules for this.
Seems somewhat harsh as it sounds like a tax simply because you are a migrant , no matter how long you have lived here.
#3
Re: New Tax to hit migrants
I know I should be interested, (as I speed towards what I thought once was an imaginneable age), but pensions just manage to out me to sleep better than 10 pints, No offence vhc 4 me, (in fact I'm PM'ing you now)
#4
Re: New Tax to hit migrants
From the little bit I have read so far , it would seem that NZ IRD intend for this to be a retrospective tax . This means it would also hit those who have already been here for years.
#5
Re: New Tax to hit migrants
Further, if you removed a lump sum to get rid of your mortgage, would you then be taxed retrospectively on that lump sum? It wasn't 'income' at all. It was my bluddy hard earned savings which I chose not to spend but to set aside as pension.
#6
Account Closed
Joined: Mar 2008
Posts: 0
Re: New Tax to hit migrants
I better read up on this. Anything to do with pensions has me sticking my head in the sand. I know I shouldn't but it just depresses me.
What if you don't know where you're going to be when you retire. What if I decide to go back to Blighty
What if you don't know where you're going to be when you retire. What if I decide to go back to Blighty
#7
Re: New Tax to hit migrants
Here is a Factswheet
What I'm finding hard to grasp is just how NZ IRD have decided what is supposedly 'income'.
I'm really rather cross about the whole thing as when I transferred my private pension scheme over I got rid of most all of the old paperwork which would show just how the scheme performed........or didn't .
I did without to put money into my pension scheme. It was money that I worked for and then put aside. By the time I transferred ,it's value had dropped hughly. How would NZ IRD know what was my original payments into that plan and what was gain or loss at the end of the day.
In fact, what if the transfer amount ended up being virtually equal to what I had paid in ! No growth !
Here is some info from Broadbase
What I'm finding hard to grasp is just how NZ IRD have decided what is supposedly 'income'.
I'm really rather cross about the whole thing as when I transferred my private pension scheme over I got rid of most all of the old paperwork which would show just how the scheme performed........or didn't .
I did without to put money into my pension scheme. It was money that I worked for and then put aside. By the time I transferred ,it's value had dropped hughly. How would NZ IRD know what was my original payments into that plan and what was gain or loss at the end of the day.
In fact, what if the transfer amount ended up being virtually equal to what I had paid in ! No growth !
Here is some info from Broadbase
#8
Re: New Tax on non-NZ personal & occupation pension plans to hit migrants old and new
Thanks Bev, I did post the link to the announcement which included the fact sheet.
You are right, the proposal is retrospective. I also agree with your comment that it appears to be a tax on migrants that have been in NZ for longer than 4 years and there could be some HUGE tax bills if this new tax is implemented as it currently stands.
Action for Brits living in NZ....
If living in NZ for less than 4 years: Read the proposals and consider how it might affect your pension savings. For the first 4 years you have a temporary tax exemption. Transferring during the 4 year exemption has no tax. Consider transferring.
If More than four years: If you have transferred your pension, consider making a submission regarding the proposals.
If your pension is still in the UK, seek tax advice immediately.
You are right, the proposal is retrospective. I also agree with your comment that it appears to be a tax on migrants that have been in NZ for longer than 4 years and there could be some HUGE tax bills if this new tax is implemented as it currently stands.
Action for Brits living in NZ....
If living in NZ for less than 4 years: Read the proposals and consider how it might affect your pension savings. For the first 4 years you have a temporary tax exemption. Transferring during the 4 year exemption has no tax. Consider transferring.
If More than four years: If you have transferred your pension, consider making a submission regarding the proposals.
If your pension is still in the UK, seek tax advice immediately.
#9
Re: New Tax on non-NZ personal & occupation pension plans to hit migrants old and new
Sorry ChCh4me. I guess I'm rather rattled & very worried by the whole thing. Me and him don't have huge sums of money. It's not like we put in hard earned money and have come away with a huge pot of gold. We didn't.
I'm not sure many migrants are getting that they could be hit with huge tax bills for something they don't really understand.
From what I've read anyone with an overseas pension fund, be it private or occupational is supposed to declare this on an NZ tax return?
When I think back to my tiny personal pension plan I;m not sure how I would have done this. The funds were managed. It's not like NZ where you are more hands on .
What is a submission and how does one do that.
I'm not sure many migrants are getting that they could be hit with huge tax bills for something they don't really understand.
From what I've read anyone with an overseas pension fund, be it private or occupational is supposed to declare this on an NZ tax return?
When I think back to my tiny personal pension plan I;m not sure how I would have done this. The funds were managed. It's not like NZ where you are more hands on .
What is a submission and how does one do that.
#10
Re: New Tax on non-NZ personal & occupation pension plans to hit migrants old and new
Thanks Bev, I did post the link to the announcement which included the fact sheet.
You are right, the proposal is retrospective. I also agree with your comment that it appears to be a tax on migrants that have been in NZ for longer than 4 years and there could be some HUGE tax bills if this new tax is implemented as it currently stands.
Action for Brits living in NZ....
If living in NZ for less than 4 years: Read the proposals and consider how it might affect your pension savings. For the first 4 years you have a temporary tax exemption. Transferring during the 4 year exemption has no tax. Consider transferring.
If More than four years: If you have transferred your pension, consider making a submission regarding the proposals.
If your pension is still in the UK, seek tax advice immediately.
You are right, the proposal is retrospective. I also agree with your comment that it appears to be a tax on migrants that have been in NZ for longer than 4 years and there could be some HUGE tax bills if this new tax is implemented as it currently stands.
Action for Brits living in NZ....
If living in NZ for less than 4 years: Read the proposals and consider how it might affect your pension savings. For the first 4 years you have a temporary tax exemption. Transferring during the 4 year exemption has no tax. Consider transferring.
If More than four years: If you have transferred your pension, consider making a submission regarding the proposals.
If your pension is still in the UK, seek tax advice immediately.
When will we know if we are going to be shafted for sure? Another issue as Bevs says is the paper trail. How on earth am I going to find from 4 diffo providers the value at 1st April 2010 so tax can be calculated if this is passed. I have e mailed one last week and I doubt if they will get back to me. If I cannot find out the amount apparently the tax man decides an amount and taxes you on that!!!! I do not want to spend any money seeing a tax lawyer as it seems a waste until we know this is law. If it is passed I recommend we all see a tax lawyer/ acct...they can save manifold what they cost and know all the tricks.
Another VERY important point is what I call the 'self dobbing form'. I think it is an 'IR 478' and allows you to 'fess up to the tax man and will apparently greatly help avoid any penalties/fines for your tax submission errors (so I am reliably informed). I have done one for both Kate and I as we should have declared our pensions under FIF rules after 1st April 2010 (if not before!).
Please seek advice before you submit a 478 which basically is a bit of paper where you write down a full and frank admission of your errors. I have done it as I do not want any skeletons in the cupboard and do not want to piss off the tax man in any way OR more importantly knowingly and illegallly EVADE paying any NZ tax.
#11
Re: New Tax on non-NZ personal & occupation pension plans to hit migrants old and new
Understandable Bev, it's the unexpected nature of this proposal that is unsetting. The other issue is that many migrants relyed on information from the IRD that they didn't have to pay tax on Pensions, so for this to come out and say actually tax is due is a real shock to the system.
A Submission can be made to: [email protected] and should include the points you agree with or don't agree with from the proposals.
The more submissions the better.
A Submission can be made to: [email protected] and should include the points you agree with or don't agree with from the proposals.
The more submissions the better.
#12
Re: New Tax on non-NZ personal & occupation pension plans to hit migrants old and new
Sorry ChCh4me. I guess I'm rather rattled & very worried by the whole thing. Me and him don't have huge sums of money. It's not like we put in hard earned money and have come away with a huge pot of gold. We didn't.
I'm not sure many migrants are getting that they could be hit with huge tax bills for something they don't really understand.
From what I've read anyone with an overseas pension fund, be it private or occupational is supposed to declare this on an NZ tax return?
When I think back to my tiny personal pension plan I;m not sure how I would have done this. The funds were managed. It's not like NZ where you are more hands on .
What is a submission and how does one do that.
I'm not sure many migrants are getting that they could be hit with huge tax bills for something they don't really understand.
From what I've read anyone with an overseas pension fund, be it private or occupational is supposed to declare this on an NZ tax return?
When I think back to my tiny personal pension plan I;m not sure how I would have done this. The funds were managed. It's not like NZ where you are more hands on .
What is a submission and how does one do that.
#13
Re: New Tax on non-NZ personal & occupation pension plans to hit migrants old and new
Hi Genesis.
I have been silently willing you to be here as I remembered you waiting years before finally taking the plunge over pensions just like myself.
My anger is building over this. Talk about getting shafted.
I have been silently willing you to be here as I remembered you waiting years before finally taking the plunge over pensions just like myself.
My anger is building over this. Talk about getting shafted.
#14
Re: New Tax on non-NZ personal & occupation pension plans to hit migrants old and new
Genesis:
If you were a transitional resident WHEN you transferred your UK Pension to a NZ QROPS then you are in the clear, these proposals do not apply = NO TAX !! This is clearly written in the proposals on page 2.
Transitional Resident is 4 years from when you arrived in NZ.
The proposed tax is not an increase on the value in your NZ QROPS (hmmm, your provider doesn't know what they are doing do they?)
If you were a transitional resident WHEN you transferred your UK Pension to a NZ QROPS then you are in the clear, these proposals do not apply = NO TAX !! This is clearly written in the proposals on page 2.
Transitional Resident is 4 years from when you arrived in NZ.
The proposed tax is not an increase on the value in your NZ QROPS (hmmm, your provider doesn't know what they are doing do they?)
Last edited by chc4me; Jul 29th 2012 at 10:57 pm.
#15
Re: New Tax on non-NZ personal & occupation pension plans to hit migrants old and new
For us that would run to July 2008. Goodness knows how people that have been out here 15/20+ years are going to get on. This seems to be looking at netting all migrants.
So we could be liable for any increase in those pensions from the 1st April 2010 until the day it is cashed in...this is what my QROPS provider has told me
What if it was a decrease. Would NZ IRD give a tax credit then?
I can't see how an accurate sum could be calculated. It would be incredibly complicated & I feel that NZ IRD simply settling on some % or other is very slack & not good enough.
They want to do this tax, then they do the work properly.
I am bloody angry as I was told this was 10000% tax free in the UK AND NZ when we signed up for it. I would NEVER have entered into the QROPS thing had we known this
. There is another angle to this apparently if your pension devalued betwixt the end of the 4 year period and the date it was cashed in they told me one can apply for a tax credit.
When will we know if we are going to be shafted for sure?
No-one , at any stage, mentioned to us about tax liability. It was all about flexibility , advantages here in NZ and tax free .
If it is passed I recommend we all see a tax lawyer/ acct...they can save manifold what they cost and know all the tricks.