[mdh]

I have spent days and days doing our tax returns, but can't find exactly all the information I want. Can anyone help?

We've been in nz for almost a year on temporary (2 year) work visas (skilled category). From my tax notes I understand we can claim split year residents (ie: we left less than half way through the tax year). But I'm not really sure what this means - does it reduce my personal allowance?

Also, now we're seriously considering selling up in uk and buying here. Our house (permanent home until we left) has been rented out for the last year - will be still be entitled to CGT relief if we sell - although we won't have lived in it since it's been rented? Will the split year treatment affect us adversely?

Any help much appreciated!

[Caroline and Dave]

I might be able to help you to some extent as we are dealing with all this at the moment and are using a tax consultant.
If you leave halfway through the tax year and start work in NZ then all the money you earn in NZ you are taxed in NZ. up to that date you will be taxed in UK.
Where the problem starts is your property. As you are renting it out in the UK then all the money you make is taxed in UK only as there is a double taxation agreement with NZ.Your next hurdle is CGT.
If you sell your house in the tax year that you are completely out of the UK then you do not pay CGT, BUT( and it is a big but) you must remain living out of the UK for five years. you can return to the UK for no more than 90 days each year. If you return to the UK within that five years for more than the allowed time then you will pay CGT. I am coming over to Auckland in Feb and will have to stay over IN NZ for five years but wee do have 15 plus properties So it is well worth doing it.
Hope this is useful to you
Please feel free to pm me

Caroline and Dave

[ruthyroo]

Are you doing your UK tax return online? I found that doing it this way was much more straightforward - the software does the calculations for you as you go along.

The non-Residence forms though are only available as papercopies (or software from somewhere other than HMI). We just filled them in and sent them off. I don't think our residence status affected our personal allowances.

I may be wrong but my impression of the Tax Returns is that you provide all the relevant info, do the sums to the best of your ability, and the tax inspectors / software will check them and tell you if their assessment matches yours - or not. So if you can't quite work it all out, the HIM soon will and let you know ifyou owe / are owed anything.

[richard]

...Where the problem starts is your property. As you are renting it out in the UK then all the money you make is taxed in UK only as there is a double taxation agreement with NZ.

....

I am not convinced you are correct about this. The double taxation agreement means you don't get taxed twice but you still have to declare the income in NZ. You do get a tax credit for any UK tax paid but since you don't get a personal allowance in NZ you may find that you have to pay some tax on the difference. The tax rates are different too.

[Paul]

You may also be entitled to claim your PPR (Principal private residence) on the sale of your main home as the renting out for one year may not affect this. This can be clouded by non residency status though
You really need to take professional advice as non residency is a complicated area

I would contact the Inland Revenue first and then contact a Uk accountant if not clear (or a NZ based UK specialist?).
Alternatively you submit your return based on the basis of claiming your sale as a PPR sale (and don't show it on your return) and wait and see if any enquiry comes up (they have a year from the filing date)

Good luck

[Caroline and Dave]

I am not convinced you are correct about this. The double taxation agreement means you don't get taxed twice but you still have to declare the income in NZ. You do get a tax credit for any UK tax paid but since you don't get a personal allowance in NZ you may find that you have to pay some tax on the difference. The tax rates are different too.


As from April 06 there is a temporary tax exemption on foreign income for New migrants & returning Newzealanders. This lasts for 49 months( www.ird.govt.nz/yoursituation-nonres/move-nz ) Of cause although this applies to us I am not sure re someone who is already in NZ?

[mdh]

Thank you for all your replies.

Re: tax return online: filled in online initially, but then as I needed forms not available online (ie: non-resident) ended up having to print it all off anyway, and will submit by post. But I found the calculations as I went very useful.

RE: CGT. Thank you again for all the advice. I did as Richard advised and rang the Centre for Non Residents who were very useful, and the tax exemption does apply - she suggested it was for 36 months. Basically, there is no CGT implication at all for selling our property having rented it out for the last year, and no worries if we end up going back to live in the UK. I understood that problems might start to arise if we left it until nearly 3 years, and then went back, but no problem for us, so that's fantastic. Therefore house is on the market!