“Transitional residents” however are exempt from New Zealand income tax on most forms of foreign-sourced income, for the first 48 months after becoming tax resident in New Zealand.

This applies not only to people who have never lived in New Zealand before, but also to New Zealanders who have lived outside New Zealand for a continuous period of at least ten years.

Transitional residents must still pay tax on any income earned from any New Zealand source.

Anyone becoming a New Zealand tax resident will have a 12 month period to decide whether any family trust becomes a qualifying trust. During that 12 month period the trust is not subject to New Zealand tax on any foreign income earned by the trust.

This is a complex area and any enquiries should be addressed to Gaze Burt’s tax partner, Les Allen.