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NZ Tax Residency
New Zealand tax residents are liable to tax on their world-wide income. It is therefore important to confirm your correct residency status while you are working abroad so that you do not face tax back home.
While the UK-New Zealand Double Tax Treaty aims to eliminate double tax, there are a wide range of situations that will cause increased tax should you be considered dual resident of the UK and New Zealand.
For example, dividends earned in the UK would be taxable in New Zealand if you are still New Zealand tax resident. You may not have paid tax on these dividends in the UK (i.e. if you are under the Higher Rate tax threshold), so there will be only a 10% tax credit to claim on your New Zealand Tax Return against tax on these dividends.
The balance in tax up to the top rate will be due on these dividends, after they are converted to dollars!
Residency is defined in Section OE 1 of ITA 1994 and the rules are summarized in IR292.
The main test is as follows: If you have been absent from New Zealand for more than 325 days in a tax year and have no “enduring relationship” with New Zealand then you are not tax resident.
It is therefore important to sort out your “enduring relationship” to clarify your status.
The Form to lodge with the NZ IRD can be downloaded here
For more information please go to www.ird.govt.nz or contact one of our advisors. |
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Dynamic Management Solutions Limited is a company registered in England and Wales with company number 3652783
and whose business address and registered office is 3rd Floor North, The Forum, 74 - 80 Camden Street, London, NW1 0EG
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