New Zealand is an attractive Tax Destination for Migrants

If you are thinking about moving to New Zealand, the tax system you would encounter differs in some important ways from the one you may leave.

Before you start your migration plans, talk to The New Zealand Immigration Network. We will make sure you are equipped with the latest New Zealand tax information specific to your needs.

Attractive key features of the New Zealand tax system

• No inheritance tax
• No stamp duty on property transactions
• No capital gains tax on real property and on profits from the sale of some equities
• The transitional resident rules
• New Zealand’s trust taxation rules

Transitional Resident Rules

As migrant you will probably qualify for transitional tax residence status which provides a 4 year tax exemption for new migrants.

This rule makes New Zealand an attractive immigration destination when compared to Australia and Canada.

The exemption lasts for 48 months counting from your arrival date and gives you plenty of time to manage your foreign investments in a tax efficient way in preparation for the expiry of the exemption.

Timing is crucial. While in most cases you might not become a New Zealand tax resident until you permanently relocate to New Zealand, this will not always apply. The Inland Revenue Department will also look at

• earlier visits to attend job interviews or visits to acquire property
• relocation of spouse and family to New Zealand prior to your arrival
• establishment of family home in New Zealand prior to permanent relocation.

In those cases the 4 year tax free window might start considerably earlier than from the date of your actual move to New Zealand.

Another fact to consider: companies and trusts do not get a 4 year exemption. Ask us how to transfer existing structures like trusts and portefolios to New Zealand.

Also, if you do not transfer your UK pension within those 4 years, you might suffer a financial loss.

So, if you want to take full advantage of the transitional resident rules, we recommend to talk to a tax specialist well ahead of your move to New Zealand.

Offshore Trust Rules

New Zealand has a unique trust taxation regime. The regime allows for two important benefits:

• The opportunity to establish a tax efficient offshore trust before arrival. If done correctly, the trust fund could accumulate free of New Zealand income tax with distributions to non New Zealand tax residents never taxed in New Zealand.
• The possibility to distribute foreign sourced income to beneficiaries living outside New Zealand free of New Zealand income tax.

However, trustees of offshore trusts may have disclosure obligations in New Zealand.

Migrants with offshore arrangements such as trusts, other offshore entities, tax shelters, tax haven investments, pension plan interests and non-NZD instruments should seek advice as to their New Zealand compliance oblications.

In any case, we cannot stress enough the importance of obtaining detailed tax advise well before arrival in New Zealand.

The above information was provided to us by Pricewaterhouse Coopers New Zealand.

For specialist tax advice tailored to your personal circumstances contact us now:

"We look forward to hearing from you!"

It is important that you seek taxation advice well before you start your migration plans: