Tax Exemptions for Migrants to New Zealand

Migrants to New Zealand may be eligible for an exemption in respect of the declaration of certain overseas income in New Zealand, and in respect of any liability to pay New Zealand tax on such income. Such migrants are called “transitional residents”.

Some general points are as follows:

• The exemption is available to new migrants and returning New Zealanders who have not been tax resident in New Zealand for at least 10 years.
• The exemption is available once in a lifetime.
• The maximum time period for  the exemption is 49 months.
• The exemption applies to most overseas income, except employment income and business income from personal services, relating to the post migration period.
• Working for families tax credits are not available to people taking advantage of the tax exemption. To see whether you will be better off with or without the tax exemption, you can use the calculators on the Inland Revenue Department's website, or talk to us.
• An application for working for families tax credits should only be made if you and your partner have decided to waive the exemption.
• If you have foreign losses, and in certain other circumstances, you may be better off waiving the exemption.
• If you are the settlor of a New Zealand foreign trust migrating to New Zealand this will affect the status of your trust. Taking advantage of the exemption will defer the loss of the tax advantages associated with having a foreign trust.

Please contact us in confidence if you need assistance with any aspect of these rules.

Kristina Andersen
Andersen Accountants Limited
Telephone: 09 3695198
Email: Kristina@andersen.co.nz
Website: www.andersen.co.nz