mac917

Can somebody please explain the reciprocal agreement that NZ and UK have with regards to overseas income. I have a UK work pension which I receive monthly and pay UK tax at source. I understand that I do not declare it/pay NZ tax to the NZ IRD for 4 years from arrival (Aug 09) and then I will pay NZ tax on the personal allowance not taxed by the UK when this time elapses. Is this correct? I an currently working and will be for many a year to come.

Any advice is appreciated or who to speak to about tax issues - besides the obvious IRD.

Regards,

Dave

mudblood21

not even slightly an expert on tax, but am finding out myself -

I am under the same impression - that you can either choose to have foreign income for four years free of income tax, or you can take a child tax credit - meaning that you get some money off your tax bill if you have kids, but not both.

I got some helpful info from a website run by 'broadbase international' - they might be helpful.

I have only one child at home, and he will be 18 in a year and a half, so I will be taking the four years tax break, even though i don't have very much money coming in from the UK.. In the UK I have to contact the tax office here, to get a zero tax deduction thing going- so i won't pay tax at either end! I sent forms off ages ago but (typically) have heard nothing yet.

thanks for reminding me - i had better get on to them!

Genesis

The IRD have give a tax break to all new arrivals..don't know when the actual start date was..BUT I MISSED IT BACK IN 2005....typical. As such I have paid the IRD a fair bit of $$s in taxation from interest earned in blighty...however by contrast I have availed myself to tax credits which on average has been about $3-4k a year in tax back..which is nice. And that is the draw back to taking the 4 year oversaes tax break...you cannot claim tax credits. This is where you get back from the govt taxation in respect to how many kids you have and what you earn. The more kids you have and the less you earn the more you get. So the above is correct.

NakiMan

Not exactly correct, Dave. After the initial 4 year tax break (if you choose to take it up) this is what I belive will happen:

You will have to tell the IRD the gross overseas income and the total of overseas tax paid. They will then convert these amounts to NZ$.
They will then calculate the amount of NZ tax that you would have paid on the gross amount, deduct the overseas tax paid and you will have to pay the difference.

bga

I think this is what you are after http://www.ird.govt.nz/yoursituation...reign-inc.html

mac917

Thanks for all the replies. It does seem to be a minefield, I will speak to the IRD and get clarification face to face.

Dave