Everything you need to know about moving to NZ

A distinction is made in New Zealand between income from superannuation funds and income from NZ and UK government, personal and occupational pensions.

In addition, you will need to know the tax position on contributions to superannuation funds, and how growth on your UK pension funds is taxed once you are resident in New Zealand. New Zealand has a double taxation treaty with the UK, so you will not be taxed twice on any income.

Contributions to superannuation funds:

Apart from the limited tax credit afforded by the KiwiSaver retirement savings scheme, contributions to superannuation funds in New Zealand are not tax free.

Growth on superannuation funds:

NZ superannuation funds are taxed on the income produced (interest and dividends) and on some offshore capital gains.

Income from superannuation funds:

Income you take from a NZ superannuation fund is regarded as “tax-paid” – you will not be subject to any further New Zealand income tax charges.

Income from NZ Superannuation:

The New Zealand Government pays a pension to citizens from 65 years of age. This is regarded as part of your taxable income, but is not means-tested.

Income from UK State Pension:

If you are eligible for the UK state retirement pension and NZ Government Superannuation, your UK state pension will be paid directly to the NZ government.

If you are not eligible for NZ Superannuation, you will receive your UK State Pension directly. It will form part of your taxable income and will need to be declared on your NZ tax return.

Income from S2P/SERPS:

Members of many UK personal and occupational pension schemes contract out of S2P (State Second Pension), or its predecessor SERPS. However, if you opted-in to S2P or SERPS rather than contributing part of your National Insurance contribution to an occupational or personal pension scheme, it is our understanding that the S2P/SERPS portion of your UK pension entitlement is generally folded in to your UK State Pension entitlement when it is assessed by NZ pensions authorities, rather than viewed as a separate voluntarily funded pension. Please note that if you choose to take your UK State Pension and S2P/SERPS payment rather than NZ Superannuation, it may affect your spouse or partner's NZ Superannuation payment if they are eligible.

Income from UK Personal and Occupational Pensions:

You are taxed on the UK personal and occupational pension income and lump sums you receive while you are resident in New Zealand.

Growth on UK Personal and Occupational Pensions:

UK personal and occupational pensions meet the NZ Inland Revenue Department QFPA (qualifying foreign private annuity) rules, so are not subject to FIF (foreign investment fund) tax – this means that as long as you cease to make contributions to your UK pension funds within four years of the start of the income year in which you become a New Zealand tax resident, you are not subject to any New Zealand tax on the growth of your UK pension fund until you take benefits from it.

If you are thinking about continuing to pay in to your UK pension fund once you are resident in New Zealand, please note that under HMRC rules you only qualify for tax relief on contributions up to the ‘basic amount’ of ₤3,600. You are only eligible for this relief for five tax years after you leave the UK.