[suebeenz]

A post in the lounge got me thinking about this.

As I've read somewhere, it's very easy to gain NZ tax residency, but a little more involved to lose it. I've met a couple kiwis who are now living overseas and are getting hounded by the IRD because they own homes in NZ. Likewise, I'm wondering what happens if I move back overseas, but don't want to sell my house here in NZ. Sounds like the IRD could interpret that to be mean that you eventually plan on coming back, and therefor are still a NZ tax resident.

Has anyone managed to keep their house in NZ, move overseas, and no longer be considered as having NZ tax residency? Would having IRRV be an additional nail in the coffin, to forever being considered a NZ tax resident?

[phatsharpie]

Take a look at this:

http://www.ird.govt.nz/yoursituation-nonres/tax-residency/

-B

[suebeenz]

Take a look at this:

http://www.ird.govt.nz/yoursituation-nonres/tax-residency/

-B


Thanks for that. I've read it before, and it's the 'enduring relationship' part that sounds fuzzy (and not warm). If one keeps a house here and/or possibly a bank account, unclear if that would be a 'enduring relationship'.

I've left countries a couple times now, and each time struggled to claim non-residence status. They usually huff and puff that all bank accounts and credit cards need to be canceled, but in the end, I've been able to safely ignore those bluffs.

Curious if anyone can speak from experience, for doing the same in NZ.

[Aussie Pom]

If your house in NZ was being rented out then you would have to pay tax on that income I would think. If all the money you earn is from the country you are living in and you pay tax there it would be hard to see how NZ would have a claim on it.
I have only had to deal with UK tax from overseas, this was pretty much how that operated. Once I sold my shoebox they weren't interested any more.
We will have to go through all this in Oz if we decide to come to NZ... should be interesting.
Gina

[suebeenz]

We will have to go through all this in Oz if we decide to come to NZ... should be interesting.
Gina

You have a good outlook on life! :yes

I'll let you know if I manage to track down the kiwis I met, living overseas with houses here.

[*Paul]

Yeah, I work in the USA for 5 months a year and spend the remainder in NZ, basically on vacation. Taxes and tax returns are my biggest gripe for this situation. It's expensive and stressful, not helped by the offset of 3 months.

When you see vague definitions of NZ tax residency it makes me appreciate that at least the US tax code, as complicated as it is, is at least open and understandable, and readily available to read on the web. All NZ can come up with is "Enduring relationship".

According to the NZ "definition" you can't own anything in the country, a home, a car, or have any relatives there.

[Super_BQ]

"Enduring Relationship" is quite a broad term. But treat it like a good thing because loose definitions can lead to all sorts of scenarios (creates loop holes).

I've dealt with residency issues in Canada and did a tax course at uni. The interesting part i've found is there were cases in tax court that a person who stayed in Canada for more than 183 days tried to claim he was resident (for social welfare or the gov't free health care) but was denied his residency claim. Likewise, there was cases where a person stayed in Canada for less than 183 days and was deemed a resident in Canada. In fact a person doesn't even have to step foot in the country and can still be deemed as a resident of Canada.

NZ's hard rule of 183 days in a year for residency is a bit lacking and should be further reinforced. Canada's tax code breaks residency down to i) financial & ii) family or relationship ties. There needs to be at least 2 or 3 ties to be established before the tax department can lay a claim. Having a membership at a the local golf club or church could be 1 tie, likewise holding a driver's license in the province/state where you use to live is another. But holding the bank account and 1 house alone isn't enough to establish residency. However, holding no bank accounts but you've paid for your's child's education at uni there + paid for the new house he/she lives in + new car + driver's license for your child AT THE SAME TIME they're collecting social benefits (ie free medical health care) can be enough to say you're resident of Canada - even though you've never stepped foot into the country.