 Pensions form part of your normal taxable income in New Zealand.
The New Zealand Government pays a pension to citizens from 65 years of age. While this is not means-tested, the amount of any foreign and UK government pensions received by people reduces the amount of the New Zealand government pension. New Zealand has a double taxation treaty with the UK, so you will not be taxed twice on any income. Apart from the limited tax credit afforded by the new KiwiSaver retirement savings scheme, contributions to pension funds in New Zealand are not tax free. NZ superannuation funds are taxed on the income produced (dividends) and on some offshore capital gains. UK personal pensions meet the NZ Inland Revenue Department QFPA (qualifying foreign private annuity) rules, so are not subject to FIF (foreign investment fund) tax – this means that you will be taxed in New Zealand when you take benefits from your UK pension, but as long as you cease to make contributions to your UK pension funds within four years of the start of the income year in which you become a New Zealand tax resident, you are not subject to any New Zealand tax on your pension until you take benefits from it. (If you are thinking about continuing to pay in to your UK pension fund once you are resident in New Zealand, please note that under HMRC rules you only qualify for tax relief on contributions up to the ‘basic amount’ of ₤3,600. You are only eligible for this relief for five tax years after you leave the UK.) Consequently, there is no time limit where you have to transfer your pensions to avoid paying New Zealand tax on them. The relevant legislation is available from the Inland Revenue website, http://www.ird.govt.nz. Search for IR 257: Overseas Private Pensions.
|
