Tax on investments and savings

You have to pay tax on any foreign investments you have, even if you’re a newly arrived resident.

Overseas investments include:

• pension schemes
• shares in foreign companies
• rental properties in another country
• bank accounts.

The tax rules for foreign investments are complicated. They vary depending on what kind of investments you have and which country your investments are held in.

If you’ve received overseas income that’s also been taxed in another country, you may be entitled to a credit for the tax already paid. You’ll receive a credit for the smaller amount of tax you paid — either the tax due in NZ on that investment or the tax you paid overseas.

Most people with foreign investments seek professional advice from a tax agent or financial adviser to ensure they pay the right tax.

International tax — IR

Tax on overseas pensions is complex. How the tax is managed depends on:

• whether your overseas pension is a government or private pension
• whether the New Zealand Government has a tax agreement with the country your pension comes from
• what other sources of income you have.

As well as paying tax on the income you receive, you may also have to pay tax on gains made by the overseas fund providing your pension.

NZ Superannuation, Veteran’s Pension and overseas pensions

Double tax arrangements on overseas pensions

To make sure you pay the right tax, you can apply to IR for a special tax code.

Choose the right tax code for your NZ Superannuation

Tax on your investment and savings income is calculated differently if you’re not an NZ citizen or resident.

Tax residency status for individuals — IR

If you have investments in NZ, your provider will deduct Non-resident withholding tax (NRWT).

Non-resident withholding tax (NRWT): payer’s guide IR291 — IR

New residents and New Zealanders who have been living outside New Zealand for at least 10 years can get an exemption from paying tax on some investments.

Your exemption lasts for up to 4 years and means you do not pay PIR on income that you get from foreign investments as long as:

• the income from them is made outside New Zealand
• the investment is in a zero-rated PIE.

Some other overseas income is exempt from tax, including rent, royalties and capital gains from the sale of property.

Temporary tax exemption on foreign income for new migrants and returning New Zealanders

Portfolio investment entities — IR

Individual taxpayers cannot usually get an exemption from paying RWT. You might be exempt if you:

• have earned or think you’ll earn more than $2 million a year
• can prove that, because of losses or other circumstances, you would be due a RWT refund of $500 or more.

Temporary tax exemption — IR

To ask for an exemption, complete the application form (IR451).

Application for exemption from resident withholding tax (RWT) on interest and dividends IR451 — IR