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Income Tax Act 2007

Income - Exempt income

CW 4: Annuities under life insurance policies

You could also call this:

“Tax-free regular payments from certain life insurance policies”

You might receive an annuity, which is a regular payment, from a life insurance policy. This annuity is considered exempt income if it meets certain conditions. The conditions are:

  1. You get the annuity from a life insurance policy that was offered or started in New Zealand by a life insurance company.

  2. Or, you get the annuity from a life insurance policy that was offered or started outside of New Zealand, but the life insurance company is based in New Zealand.

If your annuity meets either of these conditions, you don’t have to pay income tax on it.

However, there’s an exception to this rule. If a superannuation fund (a type of retirement savings plan) receives an annuity that’s already considered excluded income under section CX 40, then this exemption doesn’t apply to that annuity for the superannuation fund.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513134.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
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Part C Income
Exempt income

CW 4Annuities under life insurance policies

  1. This section applies when—

  2. a person is paid an annuity under a life insurance policy offered or entered into in New Zealand by a life insurer; or
    1. a person is paid an annuity under a life insurance policy offered or entered into outside New Zealand by a life insurer resident in New Zealand.

      1. The annuity is exempt income.

      2. An annuity that is excluded income of a superannuation fund under section CX 40 (Superannuation fund deriving amount from life insurance policy) is not also exempt income of the fund under this section.

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