Tax Implications &
Transferring Pensions

Article published in the United Kingdom, February 2012

For those of you migrating to New Zealand permanently, you may be considering whether or not to bring your United Kingdom based private pensions with you. As part of your decision-making process, it is worth giving some thought to the New Zealand tax implications involved.

If you have decided to move to New Zealand indefinitely, there are certain advantages in having your pensions transferred to and managed from New Zealand.

After an initial tax-free period of four years, which applies to most new migrants to New Zealand, any UK (or other non-NZ based) superannuation schemes, pension or annuity investments, life insurance policies or shares are likely to become subject to New Zealand’s foreign investment fund (FIF) rules.

If the FIF rules apply, your investment funds will be taxable. If the fund is taxed under the FIF rules, gains are taxed on an unrealised basis, using a deemed return or comparative value method, and the tax liability arises whether or not you receive a distribution from your fund.

There are a number of exemptions that might apply. In particular, special exemptions applying to an interest in an employment-related foreign superannuation scheme may be relevant as may the non-resident’s annuity or pension exemption. Each of these exemptions only applies in limited circumstances and the schemes in question must contain specified restrictions on withdrawals. A $50,000 de minimis exemption may also apply.

If your pension is exempt from the FIF rules, then whilst you will not be taxed on the underlying investment funds as set out above, you may still be taxed on actual receipts from the fund.

Earnings of a New Zealand registered superannuation scheme are taxed within the scheme and distributions from the scheme to you are paid tax-free. Many New Zealand registered superannuation schemes are also portfolio investment entities (“PIE”), which allow concessionary tax treatment.

If you cannot withdraw your pension entitlements in full prior to the expiry of your four year transitional resident tax exemption period, but it is possible and financially viable for you to transfer your pension to a New Zealand scheme, it may be advisable to do so.


The above article is provided for general information purposes and does not constitute legal advice.

The partners at Jones Law are internationally qualified and practise in the areas of cross-border tax planning, estate planning and acquisition structuring.

The above article is provided for general information purposes and does not constitute legal advice.

The partners at Jones Law are internationally qualified and practise in the areas of cross-border tax planning, estate planning and acquisition structuring.

We invite you to contact us at info@jones-law.co.nz to discuss your specific circumstances.

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