Oddball question about FIF tax and living in Australia

[kiwichick]

Here's a question for any Kiwis living in Australia under the special category visa. It's my understanding that this is technically a temporary visa, and as temporary residents, New Zealanders do not need to pay Australian income (or capital gains) tax on overseas investments. But you are still a resident of Australia for tax purposes, and therefore no longer a resident of New Zealand for tax purposes, so you don't need to pay FIF tax on investments that are in (for example) US stocks.

Is this right? So are investments outside Australia and New Zealand not taxed at all? I'm trying to figure this out from the IRD and ATO websites, but I'm not having much luck. I'll likely move to Australia in a few years, so it's not a question I need answered immediately - hence I don't want to consult an accountant - just hoping someone here may have experience with the system.

Thanks.

[drew]

You might remain a NZ tax resident even after you leave. Its possible to be a dual tax resident in 2 jurisdictions. Suggest you read the IRD info as a starting point - http://www.ird.govt.nz/international...ncy-index.html

[kiwichick]

Yes, it looks like you're still a tax resident for ~ 1 year after departure. But after that it's a bit iffy it seems.

[Harvey Specter]

Its possible to be a dual tax resident in 2 jurisdictions.

Yes - a nightmare if ever there was one.

Yes, it looks like you're still a tax resident for ~ 1 year after departure. But after that it's a bit iffy it seems.

If you only go over there on a temporary visa, then there is probably an assumption you will return so hard to lose NZ tax residences even for periods much longer than a year. Need to cut NZ ties as much as possible so any NZ bank account, investment, memberships, wives (even ex wives), property counts against you.

[drew]

Theres 2 tests - day count and PPOA.

You need to be outside of NZ for 365 days. If you are then you are non-resident from the day you left - provided you do not have a PPOA here. Thats the subjective part. Given you only have a temporary visa it could be viewed that you have not left NZ permanently.

If you have substantial assets then it would pay to get professional advice.

[GTM 3442]

Theres 2 tests - day count and PPOA.

Yes, the new emphasis on PPOA made it so much easier.

The previous emphasis on "links with New Zealand" was much more of a grey area. It still exists, but seems to be much reduced in importance.

The IR886 residency questionnaire might also be worth following up:

http://www.ird.govt.nz/taxagents/pro...z-tax-res.html


However, as drew said "If you have substantial assets then it would pay to get professional advice"