Tax Exemption for New Residents

New Zealand is giving you a break

A generous tax break is available to migrants to New Zealand for the first four years of their residency.

Tax Exemption for New Residents

Anyone arriving in New Zealand after 1st April 2006 and who qualifies as a "Transitional Resident" will be exempt from NZ Income Tax for four years on all foreign sourced income other than employment income and income from the supply of services.

This means that investments held overseas that generate income, including dividends and interest, will not have this income taxed under NZ tax laws. This would also apply to certain types of pension funds held overseas.

A Transitional Resident is a person who:

  1. has a permanent place of abode in New Zealand and
  2. was not resident in NZ for a continuous period of 10 years prior to acquiring that place of abode and
  3. has not previously been a "transitional resident"

In plain English the "permanent place of abode" test is based on factors such as whether you are going to live here permanently, whether you have bought a house and how strong your association with NZ is (bank account, children at school, permanent job etc.).

If you hold investments in the UK and other overseas countries, the Transitional Resident rules can result in significant tax savings in your first four years in New Zealand.

For more information, see here .

Anyone arriving in New Zealand after 1st April 2006 and who qualifies as a "Transitional Resident" will be exempt from NZ Income Tax for four years on all foreign sourced income other than employment income and income from the supply of services.

This means that investments held overseas that generate income, including dividends and interest, will not have this income taxed under NZ tax laws. This would also apply to certain types of pension funds held overseas.

A Transitional Resident is a person who:

  1. has a permanent place of abode in New Zealand and
  2. was not resident in NZ for a continuous period of 10 years prior to acquiring that place of abode and
  3. has not previously been a "transitional resident"

In plain English the "permanent place of abode" test is based on factors such as whether you are going to live here permanently, whether you have bought a house and how strong your association with NZ is (bank account, children at school, permanent job etc.).

If you hold investments in the UK and other overseas countries, the Transitional Resident rules can result in significant tax savings in your first four years in New Zealand.

For more information, see here .

This article was contributed by Jeremy Henderson from Broadbase International. Their UK website, www.broadbaseimmigration.co.uk, has a great range of up-to-date articles on life in New Zealand written especially for prospective migrants.

Further reading

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