Income Tax Exemption for New Immigrants

 A generous tax break is available to migrants to New Zealand for the first four years they are here.

Anyone arriving in New Zealand after 1st April 2006 and who qualifies as a "Transitional Resident" will be exempt from New Zealand 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 New Zealand tax laws. This would also apply to certain types of pension funds held overseas. 

A Transitional Resident is a person who: 

• Has a permanent place of abode in New Zealand and
  
• Was not resident in NZ for a continuous period of 10 years prior to acquiring that place of abode and
• 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 New Zeaaland is (bank account, children at school, permanent job etc.).

Tax Savings 

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 http://www.ird.govt.nz/income-tax-individual/temp-tax-empt-foreign-inc.html. 

This article was supplied by Broadbase International Ltd (www.broadbaseinternational.com). Information contained in this article is of a general nature and is not intended as a substitute for professional advice based on your individual circumstances. Disclosure statements are available on request and free of charge.