New Zealand Taxation Rules.

Taxation issues can be complex and we always advise you to contact your own taxation or legal professional for advice.

On 27th February 2014 The Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill was passed by the NZ Parliament.  The bill makes reforms to the taxation of foreign superannuation to make the rules simpler and easier to comply with, with the changes due to come into effect from 1 April 2014.  If you withdraw funds or transfer a lump sum from a foreign superannuation scheme while you are a New Zealand tax resident the lump sum could be taxable.

See the IRD website for information on foreign superannuation, and for IRD tax rules on foreign superannuation lump sum transfers.

When you come to New Zealand as a new migrant you usually have a 4 year exemption period for lump sums received on or after 1st April 2014, which means you won’t have to pay tax on any lump sum you receive from a foreign superannuation.  This does not include a regular pension paid to you from a foreign pension scheme, which is generally taxable in full when received.

Once you have transferred your UK Pension then tax is automatically taken care of (from that point onwards) by your new QROPS Fund in NZ – the tax situation we are talking about here is the potential tax due for the time between the end of your 4 year exemption period and the day your pension fund is finally transferred to New Zealand.

It costs nothing to talk to us on  0800 697367, or complete a free assessment and we will be happy to help.

The IRD have published an ‘Individual income tax return guide 2023’ on their website – page 21 of this guide specifically refers to Foreign superannuation withdrawals or transfers.

Use this guide to assist in filing an IR3 tax return.

Also see IR257 for more information on the taxation of foreign superannuation lump sums and overseas pensions.