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Overseas foreign superannuation and the IRD

The tax legislation around overseas foreign superannuation holdings has changed. If you have foreign superannuation (except Australia), you need to be aware of these changes and the tax liability associated with those holdings.

We recently wrote a blog article about this at

Do you have super in the UK or USA? Or have you brought it back since 1st January 2000?

This topic is getting more publicity and it is important that you pay attention.  Diana Clement wrote an excellent article in the NZ Herald, which stresses that the IRD WILL be chasing people who have transferred their pension from the UK into QROPs schemes.
Diana Clement: Taxman lines up king hit on overseas pensions
For your reference, here is a table of the amount of your pension that will taxed at your marginal tax rate if you bring it back to NZ after you have lived here for four years.  Please note that you are exempt from paying taxation if you bring your foreign superannuation back to New Zealand in the first four years that you live here (or return here if you have been away for an extended period of time.)  These dates start AFTER the first 4 years exemption period.  So if you have been here for five years, then 1 schedule year will apply.

Default fractions of foreign superannuation withdrawals

 

Column 1                                Column 2 schedule

schedule year                           year fraction (%)

 

1                                                 4.76

2                                                 9.45

3                                                14.06

4                                                18.60

5                                                23.07

6                                                27.47

7                                                31.80

8                                                36.06

9                                                40.26

10                                               44.39

11                                               48.45

12                                               52.45

13                                               56.39

14                                               60.27

15                                               64.08

16                                               67.84

17                                               71.53

18                                             75.17

19                                             78.75

20                                             82.28

21                                             85.74

22                                             89.16

23                                             92.58

24                                             95.83

25                                             99.08

26+                                          100.00

Please note that Moneyworks are not tax advisers, we are financial planners. For tax advice, please consult a tax specialist.

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