[Moorf]

A couple of queries.

Woz will be working from home as of mid/end January. He will be paid by the UK company, in UK£, on the company payroll in the UK. Can someone confirm that the company should pay him the gross amount, and he then declares the tax here in NZ? Is that the best scenario?

Any help / tips appreciated.

Second query - if Woz starts up a company here in NZ, can he employ my brother (who is also contracting with the same UK company which basically consists of Woz, me, my bro and our investor/CEO?), therefore allowing my bro to come and live in NZ (obviously subject to the requirements of advertising the position in NZ first etc for 3 months....) or would that not be allowed due to some % of the company being required to be NZ citizens? The company is a software development outfit.

Again, any help or other peoples experiences much appreciated.

Moorf

[Paul]

Moorf
As a non resident in UK Woz should be able to apply for a NT tax code (non taxable) from the Inland Revenue. As far as National Insurance is concerned it will depend on reciprocal arrangment in place with NZ (which I think there is one) so may be able to not pay this either. Obviously the income would need to be then declared on NZ tax return

Try this page http://www.hmrc.gov.uk/cnr/

That reference page is worth a look for anyone emigrating actually as there is some useful info on there including the contact number for non residents section

:cheers

[Moorf]

That's a fantastic link Paul, thank you :nice1

[Avalon]

Moorf,

Re employing your Brother. My info on this may be out of date now - so please do double check it - but If i recall rightly the requiremnt for advertising in NZ first would depend on teh Visa he applied for (Work vs PR). Also, if you and woz had aobtained Buisness Visas to come here then you may have been required to emply NZ'ers, but it really should not have been a condition. If you already have PR and then set up a business - its up to you what you do, and you coould (as far as im aware ) employ all Brits if you wanted to.

Your problem as I can see it is going to be the VISA that your brother would apply for. If he has enough points under the SMC then that would be simplest. If he requires a job offer to get the points then that may be more tricky. I think this is an area where you probably need to speak to someone at NZIS to get some clarification on what you can and cannot do.

Hope that helps a bit

[Avalon]

Moorf,

Not sure if this would be any use to you - but ive found a new Book called "Pay Zero Taxes" by Peter Sibbald. Apparently he has a previous book called "Slash your taxes" which is for self employed people. Now I know its not directly related to your question - but it may be useful if you DO end up paying tax in New zealand rather than UK.

Ive only just started the book - so I cant yet say how good it is - but it seem to be the book that explains all teh Tax loopholes that the Kiwis use - ie how they set up "businesses" running at a loss for several years to minimise thier tax bills.

[Diny]

Moorf,


Ive only just started the book - so I cant yet say how good it is - but it seem to be the book that explains all teh Tax loopholes that the Kiwis use - ie how they set up "businesses" running at a loss for several years to minimise thier tax bills.

Believe me I'm no whiz when it comes to calculating taxes etc but the above comment did catch my eye.

My hubby works for a US company, works in Egypt, gets paid US dollars and gets paid into a Jersey bank account and lives in NZ. You can imagine the nightmare his tax throws up. However, we found ourselves a really switched on accountant over here and we have now set up a company, bought another house (which we now rent out) in that company name and run it as a company making a loss. I know that sounds very simplistic and there's alot more 'ins and outs' involved but we are assured it's the way to go to reduce our tax bill - time will tell I guess.

Diny

[Paul]

The NZ government is clearly a little more relaxed about such schemes. In the UK such a scheme would be classed as "tax avoidance" by Mr Brown and his cronies along with any legitimate planning measures that may actually save people tax - grrrr :(

[Diny]

The NZ government is clearly a little more relaxed about such schemes. In the UK such a scheme would be classed as "tax avoidance" by Mr Brown and his cronies along with any legitimate planning measures that may actually save people tax - grrrr :(


I'm not so sure Paul. Some friends of ours in the UK own 3 'extra' houses, bought them all under a company name and run each house (i.e the company) at a loss. The tax cuts they get are amazing - and all above board. But like I say, I'm no tax whiz and am pitifully under-qualified to talk with much detail about the matter.

Diny

[Paul]

I'm not so sure Paul. Some friends of ours in the UK own 3 'extra' houses, bought them all under a company name and run each house (i.e the company) at a loss. The tax cuts they get are amazing - and all above board. But like I say, I'm no tax whiz and am pitifully under-qualified to talk with much detail about the matter.

Diny

Diny

Good luck to them if they've taken proper advice and are happy with the risks. As long as there is tax there will always be "schemes" some which will work (and therefore the law gets changed at some point) and those which would struggle to stand up to any scrutiny.
My rant is more at G Brown and his classification of everything that saves tax being classed as tax avoidance! Makes my job much more difficult! :nice1

[Diny]

[QUOTE=PaulMy rant is more at G Brown and his classification of everything that saves tax being classed as tax avoidance! Makes my job much more difficult! :nice1[/QUOTE]


I totally agree with you !!

Diny

[foolsgold99]

We've gone slightly off topic here, but what you need to do is set up a LACQ (Loss Attributing Qualifying Company), in simple terms A LAQC must pass on any losses it makes to its shareholders, who can offset the losses against their other income.

This means it's ok to make a loss by making mortgage payments on a rental house, where the rent doesn't ocver your costs, you can write this cost off against the tax you pay from your job. You can also show a loss for deprectiation and wear and tear on rental props.

If you are doing this, it makes sense to have as little equitiy as poss in the rentals, as you can claim tax relief on these mortgage payments, and as much as possible in your onw home, where you can't.

http://www.govt.nz/record?tid=1&treeid=349&recordid=1950

[Diny]

There you go ...... in a nutshell. The above post by Foolsgold is exactly what we've done/are doing.

Diny

[Avalon]

It worth noting that teh government are threatening to close the tax loopholes that allow this in NZ. At the moment it seems to be a lot of bluster ffrom Mr Mallard (?) but hes actually figured out that hes losing money!

Nothing to worry about at the moment - but Diny - just keep an ear open for squeals in the news. Your accountant should know well before hand if its going to happen anyway.