Moving to New Zealand

New Zealand imposes income tax on a residency basis. Once an individual or organization becomes resident for tax purposes in New Zealand, income tax is imposed on worldwide income during the period of tax residency. We can inform and navigate you through this process, and provide you with a taxes for expats review in respect of tax obligations in your home country if this is still relevant to your status.

Whether making a permanent or temporary move to New Zealand, several issues arise.

The first issue is the way in which New Zealand income tax is imposed on new migrants. New Zealand income tax legislation may provide tax relief for new migrants arriving after 1 April 2006, for four years after settling in New Zealand. This is the Transitional Resident Exemption.

Relief is available through an exemption from New Zealand income tax on most categories of foreign income once specific eligibility criteria are met. A useful planning technique when moving to New Zealand is to manage the date at which transitional resident status takes effect, in order to gain maximum relief using this exemption. This is appropriate when a migrant visits New Zealand in advance of immigrating, such as an exploratory visit to seek out employment or accommodation.

Upon expiration of the transitional resident period residents of New Zealand are taxable on their worldwide income. Residents are then exposed to the pseudo-capital gains taxing regime which exists in New Zealand. In addition to certain capital gains derived within New Zealand being taxable, certain other taxing mechanisms can bring to account unrealised capital gains and losses on some categories of foreign investments, including shares and retirement schemes.

Furthermore, unrealised foreign exchange gains on foreign currency-denominated accounts are taxable in New Zealand unless exempt under a de-minimis rule, and foreign exchange losses are not necessarily deductible.