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Income Tax Act 2007

Timing and quantifying rules - Controlled foreign company and foreign investment fund rules - Attributing interests in FIFs

EX 43: Non-resident’s pension or annuity exemption

You could also call this:

“Tax exemption for certain overseas pensions or annuities”

If you have rights to receive money from a pension or annuity from a foreign investment fund (FIF), these rights might not count as an attributing interest. This means you might not have to pay tax on them. For this to happen, you need to meet two main conditions.

First, you must have paid for these rights in one of these ways:

  • When you weren’t living in New Zealand
  • Within 3 years after you moved to New Zealand
  • When you were living in New Zealand, but you changed your superannuation fund because you were planning to leave New Zealand

Second, you can’t be able to give away your future benefits or swap them for money or other things now. There are two exceptions to this:

  • You can give the rights to your spouse as part of a relationship agreement
  • You can swap them, but only if it means you’ll get much less money overall

These rules don’t apply if you got these rights before the 1996-1997 tax year and you chose to treat them as an interest in a foreign investment fund for that year and later years. To do this, you would have had to follow the rules in section CG 15(4) of the Income Tax Act 1994.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515551.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
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EX 42B: Interests in foreign superannuation scheme other than FIF superannuation interests, or

“Foreign superannuation rights that aren't FIF interests”

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EX 44: Five calculation methods, or

“How to choose from five methods to calculate your foreign investment fund income or loss”

Part E Timing and quantifying rules
Controlled foreign company and foreign investment fund rules: Attributing interests in FIFs

EX 43Non-resident’s pension or annuity exemption

  1. The rights of a natural person to benefit from a pension or annuity provided by a FIF are not an attributing interest if the requirements of subsections (2) and (3) are met.

  2. The person must have provided the consideration for acquiring the rights—

  3. when the person was not resident in New Zealand; or
    1. when the person was resident in New Zealand but in the period ending 3 years after the end of the income year in which they last became a New Zealand resident; or
      1. when the person was resident in New Zealand but as a result of commuting or transferring their interest in a superannuation fund in anticipation of their ceasing to be a New Zealand resident.

        1. The person’s future benefits must not be able to be assigned, or exchanged for a current receipt of cash, or other property, except—

        2. if the person is assigning the benefit rights to a spouse under a relationship agreement; or
          1. at the cost of a substantial decrease in the present value of the benefits.

            1. Subsection (1) does not apply if—

            2. the rights were acquired before the 1996–97 income year; and
              1. the person chose to treat the rights as an interest in a foreign investment fund for the 1996–97 income year and later income years by complying with the requirements of section CG 15(4) of the Income Tax Act 1994.

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                Notes
                • Section EX 43 list of defined terms matrimonial agreement: repealed, on , by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).