Foreign Superannuation

In recent years there have been changes around the tax treatment of Foreign Investment Funds (FIF's). This is particularly relevant for many migrants and kiwis returning home from overseas.

A lot of discussion has been on investments in foreign companies and/or unit trusts, but many taxpayers have been unaware of or overlooked the fact that the rules also apply to foreign superannuation schemes.

From 1 April 2014 withdrawals from foreign superannuation schemes (including transfers to Australian and New Zealand schemes) will have a tax cost.

The rules also apply to withdrawals from foreign superannuation schemes since 1 January 2000. If you have not complied with the FIF rules there may be tax to pay.

There are options around how this tax is calculated, but the adjustment must be included in your 2014 or 2015 income tax return.

We know that the IRD are aware who has transferred lump sums into New Zealand superannuation schemes since 1 January 2000, and they are watching to see who makes the relevant disclosures.

If you think you may be in this situation, please give us a call on 578 3386.

You do not have to be a tax client of TvA to have an initial discussion about how the rules will apply in your circumstances.