[victoria24]

from what I understand, the uk and nz governments have an arrangement whereby you can nominate which country you pay tax on certain types of income?
in the uk, income from spread betting which is a form of stock trading is classed as betting so is non taxable. would this be the same if I was a nz resident if the trading account was still held in the uk?

[victoria24]

anyone?

[dusk]

*shrugs* sorry, not a clue!

[SteveR]

i think that any form of money you earn/receive is classed as income in NZ. you will have to pay tax on it even if earned in the UK and you pay tax at NZ rates 19.5% for upto $38000, 33% for between $38000 and $60000 and 39% for over 60000 total NZ income. if tax paid in the uk then you only pay the difference to bring it upto NZ rates! or even a refund (yeah right)

i.e bank interest in the uk is normally paid at 20% so on your NZ tax return you show evidence of this tax paid then you only have to pay the difference so say you earn $50000 in your job you will pay an extra 13% on the money earned in the UK, if no tax paid on the UK money then you pay 33% or if it takes you into the next tax bracket you could be paying the full 39%..


i am not an accountant or tax advisor but this is just my understanding of it, it might pay you to speak to NZ inland revenue to confirm as a sudden bill for 39% of you money earned might be a shock:(

[victoria24]

thanks Steve. apologies for my "anyone" comment. I wasnt being rude, just tring to restart the thread :-)

[James 1077]

I don't think that you can nominate where you are taxed on certain income as the NZ / UK double tax treaty is pretty standard and so you are, in general, taxed on your worldwide income whereever you are tax resident. So, again in general, if you spend more than 6 months in the UK then you'll be taxed on your full year's income in the UK and more than 6 months in NZ you'll be taxed on your full year's income in NZ.

You will, however, get a credit for any tax paid overseas so you will end up paying the amount of tax in the higher rate jurisdiction but no more.

HOWEVER, NZ currently has the 4 year foreign passive income exemption that you can elect into when you arrive in NZ. So if the income were classified as passive income (ie dividends, interest, capital gains) then it wouldn't be taxable in New Zealand anyway.

Having said all of this I think that betting income is also tax free in NZ (but could be wrong as I haven't looked it up) so I imagine that you'll be OK anyway. The reason for making the income tax free is that most people lose when gambling so if the income were taxable then the losses would be deductible which, given that there are more losses than gains, isn't too good for the Treasury! :)

[lnz]

Hi James 1077,

Re the 4 year passive income exception...

HOWEVER, NZ currently has the 4 year foreign passive income exemption that you can elect into when you arrive in NZ.

I didn't realise you had to elect into it. We'll be getting there in December / January. What do I have to do and is there a restriction on how long after our arrival we can do this?

[IanW99]

Hi James 1077,

Re the 4 year passive income exception...



I didn't realise you had to elect into it. We'll be getting there in December / January. What do I have to do and is there a restriction on how long after our arrival we can do this?

Actually you don't have to elect into it, you are automatically granted if you qualify. See Temporary Tax Exemption on foreign income for new migrants (http://www.ird.govt.nz/yoursituation-nonres/move-nz/temp-tax-empt-foreign-inc.html) for more details.

It should be noted that you can't claim Working for families tax credits at the same time so need to decide which is the best option for you.

Ian

[James 1077]

You do it when you apply for your IRD number - it is a tick box on the form.

You don't actually have to elect into it - as I think that you can simply not declare the income on your tax return but as the box is there on the IRD number application you might as well!