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NZ Tax Bill Introduced - UK Pensions

NZ Tax Bill Introduced - UK Pensions

Old Nov 5th 2013, 5:42 pm
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Default Re: NZ Tax Bill Introduced - UK Pensions

chc4me I cannot thank you enough for your input on this tricky issue. I have tried to read several pages of the thread but have not (so-far) found a similar case to myself.

I moved to NZ from the UK in 2001 and became a citizen in 2006. I returned to the UK for family reasons in 2007. I had a few paid-up pension funds before moving to NZ and did not transfer them as I was unsure where I was going to retire. I still have those pension funds and in the UK have been contributing to a new currently small fund.

I hope to return to NZ within the next 2,3, or 4 years (I am currently 57 years old) to work a little before retirement and would like to transfer my pensions to NZ at that time. My aim would be to continue to keep the funds in a paid up state in authorised NZ fund(s) until I reached 65 or maybe even a little past that time. I may have been (or could be) out of NZ for 10 years before returning home (if that it relevant). I guess I'm hoping that after a period of time the 4-year grace period may start afresh after 10, 20, 100 years

What is my tax position (If you can tell from this brief description).

Best regards, JackJ
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Old Nov 10th 2013, 9:20 pm
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Default Re: NZ Tax Bill Introduced - UK Pensions

Thanks Jack for your question. As usual, one question leads to another and what may appear straight forward can quickly become complex. You would need to consult a suitable accountant to confirm your tax status as there are many situations that can impact a persons tax position.

As a general answer to your question, the 4 year tax exemption, called "Transitional Resident", started on 1 April 2006 and is a one time only offer for new migrants. You may qualify for this as it does apply to returning residents if they have been away from NZ for 10 years, (with a few conditions) so you might be in luck. Here is a link for more information.

The new Tax Bill referred to in the heading of this thread does allow for a general 4 year grace period for those that do not qualify for Transitional Resident. Again this exemption is subject to conditions which you will be able to explore closer to the time of your return to NZ.

Great questions.
Thanks.
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Old Nov 10th 2013, 9:23 pm
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Default Re: NZ Tax Bill Introduced - UK Pensions

Originally Posted by chc4me
Thanks Jack for your question. As usual, one question leads to another and what may appear straight forward can quickly become complex. You would need to consult a suitable accountant to confirm your tax status as there are many situations that can impact a persons tax position.

As a general answer to your question, the 4 year tax exemption, called "Transitional Resident", started on 1 April 2006 and is a one time only offer for new migrants. You may qualify for this as it does apply to returning residents if they have been away from NZ for 10 years, (with a few conditions) so you might be in luck. Here is a link for more information.

The new Tax Bill referred to in the heading of this thread does allow for a general 4 year grace period for those that do not qualify for Transitional Resident. Again this exemption is subject to conditions which you will be able to explore closer to the time of your return to NZ.

Great questions.
Thanks.
Hi chc4me i wonder if you can recommend an accountant in Auckland who has good knowledge of the NHS pension NZ tax law and the pros and cons of transfers.
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Old Nov 10th 2013, 10:12 pm
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Default Re: NZ Tax Bill Introduced - UK Pensions

ChCh4me is a UK pension transfer specialist. Perhaps hire him.
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Old Nov 10th 2013, 10:30 pm
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Default Re: NZ Tax Bill Introduced - UK Pensions

Thanks Bev for the vote of confidence. For Plent2d, accountants in Auckland, no I don't have any specific person in mind but you might like to start with the main firms. I do encourage you to do your own research, interview at least 3 accountants and make sure the accountant knows about the new bill going through parliament as well as the current tax laws for UK pensions (finding that person is not as easy as it sounds!!). Most accountants offer the first hour free.
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Old Nov 21st 2013, 4:06 pm
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Default Re: NZ Tax Bill Introduced - UK Pensions

Originally Posted by chc4me
Thanks Jack for your question. As usual, one question leads to another and what may appear straight forward can quickly become complex. You would need to consult a suitable accountant to confirm your tax status as there are many situations that can impact a persons tax position.

As a general answer to your question, the 4 year tax exemption, called "Transitional Resident", started on 1 April 2006 and is a one time only offer for new migrants. You may qualify for this as it does apply to returning residents if they have been away from NZ for 10 years, (with a few conditions) so you might be in luck. Here is a link for more information.

The new Tax Bill referred to in the heading of this thread does allow for a general 4 year grace period for those that do not qualify for Transitional Resident. Again this exemption is subject to conditions which you will be able to explore closer to the time of your return to NZ.

Great questions.
Thanks.
Thanks for the insight chc4me. It's something to check when I do return for sure. Chances are that the law may be changed between now and then too.
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Old Nov 27th 2013, 6:30 am
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Default Re: NZ Tax Bill Introduced - UK Pensions

Hi Chch4me.

Quick Q if I may

I arrived this year. I sought advice on my 17 year old teachers pension before I left.

I was advised to leave it in the UK, and wait to see if the Govt get their changes thru. If they don't my pension as a UK teacher has a lot of benefits.

Should I consider a transfer within the four years - would it still be worth my while?
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Old Dec 2nd 2013, 12:36 am
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Smile Re: NZ Tax Bill Introduced - UK Pensions

Originally Posted by M_and_M
Hi Chch4me.

Quick Q if I may

I arrived this year. I sought advice on my 17 year old teachers pension before I left.

I was advised to leave it in the UK, and wait to see if the Govt get their changes thru. If they don't my pension as a UK teacher has a lot of benefits.

Should I consider a transfer within the four years - would it still be worth my while?
A Teachers Pension does have a lot of benefits!! I suggest to all my clients to compare the transfer value with those benefits and then make a decision on keeping it in the UK or transferring. That way you can make an informed decision.

Obtaining a transfer value is free but can take 3 months. If you are transferring within the first 4 years, then you may be able to make the transfer tax free (Which is a big benefit). There will be other factors to consider as part of your decision such as what happens if I die, where will I retire, whats more important a Lump sum of money or a regular income.

Tax is just one angle. Consider the whole picture before making a decision and make sure it is an informed decision.
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Old Dec 2nd 2013, 12:45 am
  #69  
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Default Re: NZ Tax Bill Introduced - UK Pensions

Just a reminder - if you are concerned about the income being taxed in the UK, remember you have a tax free allowance there.
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Old Dec 2nd 2013, 12:09 pm
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Default Re: NZ Tax Bill Introduced - UK Pensions

Seems like a good way to deter retirees from heading to NZ. If they're retiring to NZ, they obviously have a comfortable amount of money behind them. Why the government wants to be greedy and tax it is ridiculous. They'd make more money through sales taxes by making it easier for them to retire there... IMO.

But then, I think pensions should be wholly tax free anyway.
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Old Dec 2nd 2013, 10:16 pm
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Default Re: NZ Tax Bill Introduced - UK Pensions

Originally Posted by jmh
Just a reminder - if you are concerned about the income being taxed in the UK, remember you have a tax free allowance there.
With regards to the tax free allowance in the UK, once you become a tax resident of New Zealand, then NZ has full rights to worldwide income. Therefore any income earned from the UK must be declared in NZ. The tax free allowance you mention is no longer relevant.

Once you become a NZ tax resident, there is a form to complete to notify the bank/the pension company/ other income sources that you are not UK resident and therefore not to deduct tax at source. More at this link.
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Old Dec 2nd 2013, 10:24 pm
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Default Re: NZ Tax Bill Introduced - UK Pensions

Originally Posted by northeastlad
Seems like a good way to deter retirees from heading to NZ. If they're retiring to NZ, they obviously have a comfortable amount of money behind them. Why the government wants to be greedy and tax it is ridiculous. They'd make more money through sales taxes by making it easier for them to retire there... IMO.
Actually its a great way to encourage those close to retirement to come to NZ and spend their money in NZ. Image this, you have saved into a UK Pension for most of your life AND received tax relief in the UK for those savings. You move to NZ age 55 and transfer your pension in the first 4 years = NO TAX on transfer.

Now because you are 55, you can start taking money out straight away and pay NO TAX on those withdrawals. *

Not a bad country afterall ......

*Withdrawals are subject to maximum limits depending on age on time in NZ
*Investments in NZ are taxed on the first 5% growth
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Old Dec 3rd 2013, 1:41 am
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Default Re: NZ Tax Bill Introduced - UK Pensions

Originally Posted by chc4me
With regards to the tax free allowance in the UK, once you become a tax resident of New Zealand, then NZ has full rights to worldwide income. Therefore any income earned from the UK must be declared in NZ. The tax free allowance you mention is no longer relevant.

Once you become a NZ tax resident, there is a form to complete to notify the bank/the pension company/ other income sources that you are not UK resident and therefore not to deduct tax at source. More at this link.
In that case I don't really see any benefit in moving your pension if you are going to be taxed by NZ tax authorities regardless of where the pension actually is (assuming you are outside of your 4 year migrant period). I know some NZ plans allow you to access your money earlier under certain circumstances but other than that, what's the point in moving it to NZ?
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Old Dec 6th 2013, 2:53 am
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Default TAX LAW PASSED !!

The tax bill has now been passed in Parliament.

Here is an article from The NZ Herald: http://www.nzherald.co.nz/business/n...ectid=11168202
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Old Dec 6th 2013, 3:11 am
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Default Re: NZ Tax Bill Introduced - UK Pensions

Quel surprise.
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