Transfer Pensions To New Zealand Is The Message To British Expatriates
If you are one of the many British expatriates in New Zealand who have around $10 billion (£5 million) in UK pensions. Then you are being advised to transfer your retirement savings to a New Zealand pension scheme. So you avoid losing a huge amount of their hard earned retirement savings to the evil taxman.
New Zealand usually goes under the radar in regards to its popularity. Because Australia, its neighbour, is a well known destination for Brits. While it does not offer the same types of beaches or hotter temperatures, it does offer beautiful nature, wildlife and green spaces. The country is so scenic that it has been the backdrop for many Hollywood movies, the latest being the Hobbit.
A second reading of the Taxation Bill was passed in Parliament just recently. This Bill covers annual rates, superannuation, and remedial matters. Its intention has been to simplify tax rules on overseas annuation schemes, and by passing the bill the simplification of the rules can be enforced.
Tax will depend gains and time you are a New Zealand resident
The vast majority of the Taxation Bill looks at the number of New Zealand residents who have an overseas superannuation, and have not been paying the correct amount. Furthermore, these residents who make up 70% out of the total, are not paying the right amount of tax when they withdraw a big lump sum or when they transfer their cash to a New Zealand pension scheme.
Jo Goodhew, Senior Citizens Minister, said that this bill would make for simpler and fairer rules in regards to taxing foreign superannuation. The changes which will be enforced from 1 April 2014. And under these changes the huge sums of money from foreign superannuation schemes will only be taxed, when they are transferred or withdrawn to an Australian or New Zealand pension scheme.
The amount of tax that will be charged, will depend solely on the investment returns made during the time the individual was a resident in New Zealand. This is the biggest change in the simplification of the current regime, under which the amount of tax that is charged when there are gains to any investment is dependent on the foreign investment fund rules.
However, there is one sticking point in this situation. Anyone that has acted in accordance to the rules, will be given the choice of paying tax under them once the Taxation Bill comes into play from April 2014.