Foreign Superannuation Funds Flashcards
(190 cards)
1
Q
The new rules apply to interests in a foreign superannuation scheme that are not _________________s. A ___________________ is an interest in a foreign superannuation scheme where either the person has applied the FIF rules to the interest in a return filed before 20 May 2013 and continues to apply those rules, or the interest was acquired when the person was resident in New Zealand.
MTG
A
FIF superannuation interest
2
Q
The new rules apply to interests in a foreign superannuation scheme that are not FIF superannuation interests. A FIF superannuation interest is an interest in a foreign superannuation scheme where either the person has applied the FIF rules to the interest in a return filed before __________ and continues to apply those rules, or the interest was acquired when the person was resident in New Zealand.
MTG
A
20 May 2013
3
Q
The new rules apply to interests in a foreign superannuation scheme that are not FIF superannuation interests. A FIF superannuation interest is an interest in a foreign superannuation scheme where either the person has applied the FIF rules to the interest in a return filed before 20 May 2013 and _______________, or the interest was acquired when the person was resident in New Zealand.
MTG
A
continues to apply those rules
4
Q
The new rules apply to interests in a foreign superannuation scheme that are not FIF superannuation interests. A FIF superannuation interest is an interest in a foreign superannuation scheme where either the person has applied the FIF rules to the interest in a return filed before 20 May 2013 and continues to apply those rules, or the interest was acquired when the person ___________________.
MTG
A
was resident in New Zealand
5
Q
When a New Zealand resident person acquires an interest when they are ______________ or treated under a double taxation agreement as being resident in another country, the foreign superannuation rules rather than the FIF rules apply.
MTG
A
non-resident
6
Q
When a New Zealand resident person acquires an interest when they are non-resident or treated __________________ as being resident in another country, the foreign superannuation rules rather than the FIF rules apply.
MTG
A
under a double taxation agreement
7
Q
When a New Zealand resident person acquires an interest when they are non-resident or treated under a double taxation agreement ___________________, the foreign superannuation rules rather than the FIF rules apply.
MTG
A
as being resident in another country
8
Q
When a New Zealand resident person acquires an interest when they are non-resident or __________________________, the foreign superannuation rules rather than the FIF rules apply.
MTG
A
treated under a double taxation agreement as being resident in another country
9
Q
When a New Zealand resident person acquires an interest when they are non-resident or treated under a double taxation agreement as being resident in another country, _______________ rather than the FIF rules apply.
MTG
A
the foreign superannuation rules
10
Q
When a New Zealand resident person acquires an interest when they are non-resident or treated under a double taxation agreement as being resident in another country, the foreign superannuation rules ___________________.
MTG
A
rather than the FIF rules apply
11
Q
When a New Zealand resident person acquires an interest when they are non-resident or treated under a double taxation agreement as being resident in another country, the ________________________.
MTG
A
foreign superannuation rules rather than the FIF rules apply
12
Q
The assessable period for foreign superannuation funds begins when the person _______________ and is not treated under any double tax agreement as resident in a foreign country.
MTG
A
first becomes New Zealand resident
13
Q
The assessable period for foreign superannuation funds begins when the person first becomes New Zealand resident and is not treated under any double tax agreement as _______________.
MTG
A
resident in a foreign country
14
Q
The ___________________ for foreign superannuation funds begins when the person first becomes New Zealand resident and is not treated under any double tax agreement as resident in a foreign country.
MTG
A
assessable period
15
Q
The assessable period for foreign superannuation funds _________ when the person first becomes New Zealand resident and is not treated under any double tax agreement as resident in a foreign country.
MTG
A
begins
16
Q
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and ________________ to the scheme while New Zealand resident, the person is taxed under the superannuation rules, rather than the FIF rules, in relation to the whole interest (ie there is no need to apportion their interest between he two set of rules).
MTG
A
continues to contribute
17
Q
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and continues to contribute _______________ while New Zealand resident, the person is taxed under the superannuation rules, rather than the FIF rules, in relation to the whole interest (ie there is no need to apportion their interest between the two set of rules).
MTG
A
to the scheme
18
Q
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and continues to contribute to the scheme ___________________, the person is taxed under the superannuation rules, rather than the FIF rules, in relation to the whole interest (ie there is no need to apportion their interest between the two set of rules).
MTG
A
while New Zealand resident
19
Q
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and ________________________________, the person is taxed under the superannuation rules, rather than the FIF rules, in relation to the whole interest (ie there is no need to apportion their interest between the two set of rules).
MTG
A
continues to contribute to the scheme while New Zealand resident
20
Q
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and continues to contribute to the scheme while New Zealand resident, the person is taxed ________________, rather than the FIF rules, in relation to the whole interest (ie there is no need to apportion their interest between the two set of rules).
MTG
A
under the superannuation rules
21
Q
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and continues to contribute to the scheme while New Zealand resident, the person is taxed under the superannuation rules, _________________, in relation to the whole interest (ie there is no need to apportion their interest between the two set of rules_.
MTG
A
rather than the FIF rules
22
Q
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and continues to contribute to the scheme while New Zealand resident, the person is taxed ______________________, rather than the FIF rules, in relation to the whole interest (ie there is no need to apportion their interest between the two set of rules).
MTG
A
under the superannuation rules, rather than the FIF rules
23
Q
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and continues to contribute to the scheme while New Zealand resident, the person is taxed under the superannuation rules, rather than the FIF rules, ___________________ (ie there is no need to apportion their interest between the two set of rules).
MTG
A
in relation to the whole interest
24
Q
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and continues to contribute to the scheme while New Zealand resident, the person is taxed under the superannuation rules, rather than the FIF rules, in relation to the whole interest (ie there is no need to ______________________ between the two set of rules).
MTG
A
apportion their interest
25
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and continues to contribute to the scheme while New Zealand resident, the person is taxed under the superannuation rules, rather than the FIF rules, in relation to the whole interest (ie there is no need to apportion their interest _________________________).
MTG
between the two set of rules
26
Where a person first acquires an interest in a foreign superannuation scheme while non-resident and continues to contribute to the scheme while New Zealand resident, the person is taxed under the superannuation rules, rather than the FIF rules, in relation to the whole interest (ie there is no need to ___________________________).
MTG
apportion their interest between the two set of rules
27
Under section ________ of the ITA, in addition to situations where a person was not a New Zealand resident when they acquired their foreign superannuation interest, the foreign superannuation rules also apply where the interest is a FIF superannuation interest but does not have a FIF income or loss because the total cost of their interests in FIFs is less than $50,000.
CF 3
28
Under section CF 3 of the ITA, in addition to situations where a person was not a New Zealand resident when they acquired their foreign superannuation interest, the foreign superannuation rules also apply where the interest is a ________________ but does not have a FIF income or loss because the total cost of their interests in FIFs is less than $50,000.
FIF superannuation interest
29
Under section CF 3 of the ITA, in addition to situations where a person was not a New Zealand resident when they acquired their foreign superannuation interest, the foreign superannuation rules also apply where the interest is a FIF superannuation interest but does not have a ____________ because the total cost of their interests in FIFs is less than $50,000.
FIF income or loss
30
Under section CF 3 of the ITA, in addition to situations where a person was not a New Zealand resident when they acquired their foreign superannuation interest, the foreign superannuation rules also apply where the interest is a FIF superannuation interest but does not have a FIF income or loss because __________________ in FIFs is less than $50,000.
the total cost of their interests in FIFs
31
Under section CF 3 of the ITA, in addition to situations where a person was not a New Zealand resident when they acquired their foreign superannuation interest, the foreign superannuation rules also apply where the interest is a FIF superannuation interest but does not have a FIF income or loss because the total cost of their interests in FIFs ______________.
is less than $50,000
32
Under section CF 3 of the ITA, in addition to situations where a person was not a New Zealand resident when they acquired their foreign superannuation interest, the foreign superannuation rules also apply where the interest is a FIF superannuation interest but does not have a FIF income or loss because the _______________________.
total cost of their interests in FIFs is less than $50,000
33
The change for “_________________” addresses this concern by ensuring that the schedule method in the foreign superannuation rules applies to lump-sum withdrawals (and transfers to New Zealand or Australian superannuation schemes) made from a foreign superannuation interest that was acquired while a taxpayer was a New Zealand resident, where the taxpayer has less than $50,000 of FIF interests.
MTG
low-value FIF superannuation interests
34
The change for “Low-value FIF superannuation interests addresses this concern by ensuring that the ____________ in the foreign superannuation rules applies to lump-sum withdrawals (and transfers to New Zealand or Australian superannuation schemes) made from a foreign superannuation interest that was acquired while a taxpayer was a New Zealand resident, where the taxpayer has less than $50,000 of FIF interests.
MTG
schedule method
35
The change for “Low-value FIF superannuation interests addresses this concern by ensuring that the schedule method in the foreign superannuation rules applies to lump-sum withdrawals (and transfers to New Zealand or Australian superannuation schemes) made from a foreign superannuation interest that was acquired while a taxpayer was a ______________, where the taxpayer has less than $50,000 of FIF interests.
MTG
was a New Zealand resident
36
The change for “Low-value FIF superannuation interests addresses this concern by ensuring that the schedule method in the foreign superannuation rules applies to lump-sum withdrawals (and transfers to New Zealand or Australian superannuation schemes) made from a ______________ that was acquired while a taxpayer was a New Zealand resident, where the taxpayer has less than $50,000 of FIF interests.
MTG
foreign superannuation interest
37
The change for “Low-value FIF superannuation interests addresses this concern by ensuring that the schedule method in the foreign superannuation rules applies to lump-sum withdrawals (and transfers to New Zealand or Australian superannuation schemes) made from a foreign superannuation interest that was acquired while a taxpayer was a New Zealand resident, where the taxpayer has less than __________________.
MTG
$50,000 of FIF interests
38
The new rules in s _____ apply when a New Zealand resident derives a benefit from a foreign superannuation scheme (defined as a “foreign superannuation withdrawal”) unless the benefit is a pension or an annuity.
MTG
CF 3
39
The new rules in s CF 3 apply when a New Zealand resident _____________ from a foreign superannuation scheme (defined as a “foreign superannuation withdrawal”) unless the benefit is a pension or an annuity.
MTG
derives a benefit
40
The new rules in s CF 3 apply when a New Zealand resident derives a benefit from a foreign superannuation scheme (defined as a “foreign superannuation withdrawal”) unless the benefit is a pension or an annuity.
MTG
from a foreign superannuation scheme
41
The new rules in s CF 3 apply when a New Zealand resident ____________________________ (defined as a “foreign superannuation withdrawal”) unless the benefit is a pension or an annuity.
MTG
derives a benefit from a foreign superannuation scheme
42
The new rules in s CF 3 apply when a New Zealand resident derives a benefit from a foreign superannuation scheme (defined as a “___________________”) unless the benefit is a pension or an annuity.
MTG
foreign superannuation withdrawal
43
The new rules in s CF 3 apply when a New Zealand resident derives a benefit from a foreign superannuation scheme (defined as a “foreign superannuation withdrawal”) ________________ is a pension or an annuity.
MTG
unless the benefit is a pension
44
The new rules in s CF 3 apply when a New Zealand resident derives a benefit from a foreign superannuation scheme (defined as a “foreign superannuation withdrawal”) unless the benefit is a pension _______________.
MTG
or an annuity
45
The new rules in s CF 3 apply when a New Zealand resident derives a benefit from a foreign superannuation scheme (defined as a “foreign superannuation withdrawal”) ________________________.
MTG
unless the benefit is a pension or an annuity
46
How is the four-year exemption for foreign superannuation, different from the transitional residency rules?
Unlike the transitional residency rules a taxpayer does not have to be a non-tax resident for a minimum period to qualify for the exemption period.
https://www.navigatoraccounting.co.nz/new-rules-for-taxing-foreign-superannuation-transfers/
47
Many people who have transferred foreign pensions to New Zealand or who have the intention of transferring their foreign pensions to New Zealand are unaware of their tax obligations. In fact, Inland Revenue estimates that _____ of people who have transferred foreign pensions to New Zealand or made a lump sum withdrawal have not complied.
Inland Revenue have indicated to tax advisors and accountants on many occasions that they will be checking foreign superannuation transfers to ensure that taxpayers complied with the rules and we are starting to work with clients who have received audit letters from Inland Revenue.
https://www.navigatoraccounting.co.nz/new-rules-for-taxing-foreign-superannuation-transfers/
70%
48
4 Year Exemption Period
The new rules also provide for a four-year period during which new migrants and returning residents can receive lump sum transfers and withdrawals with no New Zealand tax to pay. This rule is similar to the _______________________ contained in s HR 8 of the Income Tax Act 2007.
However, unlike the ___________________ a taxpayer does not have to be a non-tax resident for a minimum period to qualify for the exemption period.
https://www.navigatoraccounting.co.nz/new-rules-for-taxing-foreign-superannuation-transfers/
transitional residency rules
49
4 Year Exemption Period
The new rules also provide for a four-year period during which new migrants and returning residents can receive lump sum transfers and withdrawals with no New Zealand tax to pay. This rule is similar to the transitional residency rules contained in s __________ of the Income Tax Act 2007.
However, unlike the transitional residency rules a taxpayer does not have to be a non-tax resident for a minimum period to qualify for the exemption period.
https://www.navigatoraccounting.co.nz/new-rules-for-taxing-foreign-superannuation-transfers/
HR 8
50
4 Year Exemption Period
The new rules also provide for a four-year period during which new migrants and returning residents can receive lump sum transfers and withdrawals with no New Zealand tax to pay. This rule is similar to the transitional residency rules contained in s HR 8 of the Income Tax Act 2007.
However, unlike the transitional residency rules a taxpayer __________________ a non-tax resident for a minimum period to qualify for the exemption period.
https://www.navigatoraccounting.co.nz/new-rules-for-taxing-foreign-superannuation-transfers/
does not have to be
51
4 Year Exemption Period
The new rules also provide for a four-year period during which new migrants and returning residents can receive lump sum transfers and withdrawals with no New Zealand tax to pay. This rule is similar to the transitional residency rules contained in s HR 8 of the Income Tax Act 2007.
However, unlike the transitional residency rules a taxpayer does not have to be ________________for a minimum period to qualify for the exemption period.
https://www.navigatoraccounting.co.nz/new-rules-for-taxing-foreign-superannuation-transfers/
a non-tax resident
52
4 Year Exemption Period
The new rules also provide for a four-year period during which new migrants and returning residents can receive lump sum transfers and withdrawals with no New Zealand tax to pay. This rule is similar to the transitional residency rules contained in s HR 8 of the Income Tax Act 2007.
However, unlike the transitional residency rules a taxpayer does not have to be a non-tax resident _________________ to qualify for the exemption period.
https://www.navigatoraccounting.co.nz/new-rules-for-taxing-foreign-superannuation-transfers/
for a minimum period
53
4 Year Exemption Period
The new rules also provide for a four-year period during which new migrants and returning residents can receive lump sum transfers and withdrawals with no New Zealand tax to pay. This rule is similar to the transitional residency rules contained in s HR 8 of the Income Tax Act 2007.
However, unlike the transitional residency rules a taxpayer ________________________________ to qualify for the exemption period.
https://www.navigatoraccounting.co.nz/new-rules-for-taxing-foreign-superannuation-transfers/
does not have to be a non-tax resident for a minimum period
54
4 Year Exemption Period
The new rules also provide for a four-year period during which new migrants and returning residents can receive lump sum transfers and withdrawals with no New Zealand tax to pay. This rule is similar to the transitional residency rules contained in s HR 8 of the Income Tax Act 2007.
However, unlike the transitional residency rules a taxpayer does not have to be a non-tax resident for a minimum period ______________________.
https://www.navigatoraccounting.co.nz/new-rules-for-taxing-foreign-superannuation-transfers/
to qualify for the exemption period
55
Australia
Effective from 1 April, 2010, any expat who has worked in Australia or are an Australian migrating to New Zealand is free to move their superannuation to New Zealand or make a withdrawal _________________.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
without any New Zealand tax to pay
56
Effective from 1 April, 2010, any an expat who has worked in Australia or are an Australian migrating to New Zealand is free to move their superannuation to New Zealand or make a withdrawal without any New Zealand tax to pay.
However, if you transfer a lump sum from another country’s scheme into an Australian scheme,__________________.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
this does attract tax
57
Effective from 1 April, 2010, any an expat who has worked in Australia or are an Australian migrating to New Zealand is free to move their superannuation to New Zealand or make a withdrawal without any New Zealand tax to pay.
However, if you transfer a lump sum from another country’s scheme into an Australian scheme, this does attract tax.
There is now the option of transferring lump sums directly into an approved super scheme in New Zealand _____________, or vice versa if you are emigrating to Australia.
like Kiwisaver
58
The system in the United Kingdom is different. Her Majesty’s Revenue and Customs taxes superannuation ______________, not during the period of the scheme.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
upon withdrawal
59
The first is the _____________ and by far the easiest to apply. You simply deduct a proportion of the gross amount and pay that as income tax in the year that you withdraw the lump sum. Bear in mind that if you have made contributions whilst a tax resident in New Zealand this may affect the amount of tax you need to pay.
The percentage is determined by how long you have been a tax resident in New Zealand. You are exempt from paying tax on your worldwide income for the first four years you are a tax resident.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
schedule method
60
The first is the schedule method and by far the ____________. You simply deduct a proportion of the gross amount and pay that as income tax in the year that you withdraw the lump sum. Bear in mind that if you have made contributions whilst a tax resident in New Zealand this may affect the amount of tax you need to pay.
The percentage is determined by how long you have been a tax resident in New Zealand. You are exempt from paying tax on your worldwide income for the first four years you are a tax resident.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
easiest to apply
61
The first is the schedule method and by far the easiest to apply. You simply deduct a proportion of the gross amount and pay that as income tax in the year that you withdraw the lump sum. Bear in mind that if you have ______________ whilst a tax resident in New Zealand this may affect the amount of tax you need to pay.
The percentage is determined by how long you have been a tax resident in New Zealand. You are exempt from paying tax on your worldwide income for the first four years you are a tax resident.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
made contributions
62
The ___________________ is more complex but is worth considering. This method only taxes you on the actual gains on your foreign super scheme between the date of the expiry of the four-year exemption and when you actually receive the lump sum.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
formula method
63
The formula method is _______________but is worth considering. This method only taxes you on the actual gains on your foreign super scheme between the date of the expiry of the four-year exemption and when you actually receive the lump sum.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
more complex
64
The formula method is more complex but is worth considering. This method only taxes you on the __________________ on your foreign super scheme between the date of the expiry of the four-year exemption and when you actually receive the lump sum.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
actual gains
65
The formula method is more complex but is worth considering. This method only taxes you on the actual gains on your __________________ between the date of the expiry of the four-year exemption and when you actually receive the lump sum.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
foreign super scheme
66
The formula method is more complex but is worth considering. This method only taxes you on the actual gains on your foreign super scheme between the ______________________ and when you actually receive the lump sum.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
date of the expiry of the four-year exemption
67
The formula method is more complex but is worth considering. This method only taxes you on the actual gains on your foreign super scheme between the date of the expiry of the four-year exemption and _________________________.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
when you actually receive the lump sum
68
The formula method is more complex but is worth considering. This method only taxes you on the _________________________ between the date of the expiry of the four-year exemption and when you actually receive the lump sum.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
actual gains on your foreign super scheme
69
The formula method is more complex but is worth considering. This method only taxes you on the actual gains on your foreign super scheme between the _________________ of the four-year exemption and when you actually receive the lump sum.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
date of the expiry
70
The formula method is more complex but is worth considering. This method only taxes you on the actual gains on your foreign super scheme between the date of the expiry ___________________ and when you actually receive the lump sum.
https://generateaccounting.co.nz/transferring-foreign-superannuation/
of the four-year exemption
71
It is only available if you have a _______________________
| https://generateaccounting.co.nz/transferring-foreign-superannuation/
defined contribution scheme
72
The formula method is more complex but is worth considering. This method only taxes you on the actual gains on your foreign super scheme between the date of the expiry of the four year exemption and when you actually receive the lump sum.
It is only available if you have a _______________________
https://generateaccounting.co.nz/transferring-foreign-superannuation/
defined contribution scheme
73
Defined benefit schemes are those where retirees are guaranteed a fixed income every week. ________________ are those where there is no guaranteed weekly income and where income is totally dependent on the contributions to, and investment performance of, portfolios.
New Zealand Superannuation can be classified as a defined benefit scheme, whereas KiwiSaver is a _______________________.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11619275
Defined contribution schemes
74
Defined benefit schemes are those where retirees are guaranteed a fixed income every week. Defined contribution schemes are those where there is no guaranteed weekly income and where income is totally dependent on the ___________________________, portfolios.
New Zealand Superannuation can be classified as a defined benefit scheme, whereas KiwiSaver is a defined contribution scheme.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11619275
contributions to, and investment performance of
75
Defined benefit schemes are those where retirees are guaranteed a fixed income every week. Defined contribution schemes are those where there is no guaranteed weekly income and where income is totally dependent on the contributions to, and investment performance of, ______________.
New Zealand Superannuation can be classified as a defined benefit scheme, whereas KiwiSaver is a defined contribution scheme.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11619275
portfolios
76
Defined benefit schemes are those where retirees are guaranteed a fixed income every week. Defined contribution schemes are those where there is no guaranteed weekly income and where income is totally dependent on the contributions to, and investment performance of, portfolios.
New Zealand Superannuation can be classified as a defined benefit scheme, whereas _______________ is a defined contribution scheme.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11619275
KiwiSaver
77
UniSaver is a _____________________. This means that benefits from UniSaver are based on contributions made and investment returns received, after deduction of fees, expenses and tax.
https://www.unisaver.co.nz/about-unisaver/
defined contribution superannuation scheme
78
UniSaver is a defined contribution superannuation scheme. This means that benefits from UniSaver are based on __________________ and investment returns received, after deduction of fees, expenses and tax.
https://www.unisaver.co.nz/about-unisaver/
contributions made
79
UniSaver is a defined contribution superannuation scheme. This means that benefits from UniSaver are based on contributions made and __________________, after deduction of fees, expenses and tax.
https://www.unisaver.co.nz/about-unisaver/
investment returns received
80
UniSaver is a defined contribution superannuation scheme. This means that benefits from UniSaver are based on ___________________________, after deduction of fees, expenses and tax.
https://www.unisaver.co.nz/about-unisaver/
contributions made and investment returns received
81
a _____________________ is a scheme where the benefits consist of contributions from employees and employers, plus earnings. KiwiSaver is a _________________ but it has additional contributions from the government.
https://www.psa.org.nz/media/campaigns/retirement-savings/
defined contribution scheme
82
a defined contribution scheme is a scheme where the benefits consist of contributions from __________________, plus earnings. KiwiSaver is a defined contribution scheme but it has additional contributions from the government.
https://www.psa.org.nz/media/campaigns/retirement-savings/
employees and employers
83
a defined contribution scheme is a scheme where the benefits consist of contributions from employees and employers, _______________. KiwiSaver is a defined contribution scheme but it has additional contributions from the government.
https://www.psa.org.nz/media/campaigns/retirement-savings/
plus earnings
84
Under section ___________ The assessable withdrawal amount under the schedule method is calculated using the formula—
(super withdrawal − contributions left) × schedule year fraction.
CF 3 (10)
85
Under section CF 3 (10) The _____________________ under the schedule method is calculated using the formula—
(super withdrawal − contributions left) × schedule year fraction.
assessable withdrawal amount
86
Under section CF 3 (10) The assessable withdrawal amount under the ______________ is calculated using the formula—
(super withdrawal − contributions left) × schedule year fraction.
schedule method
87
Under section CF 3 (10) The assessable withdrawal amount under the schedule method is calculated using the formula—
______________________ − contributions left) × schedule year fraction.
(super withdrawal
88
Under section CF 3 (10) The assessable withdrawal amount under the schedule method is calculated using the formula—
(super withdrawal ___ contributions left) × schedule year fraction.
-
89
Under section CF 3 (10) The assessable withdrawal amount under the schedule method is calculated using the formula—
(super withdrawal − __________________ × schedule year fraction.
contributions left)
90
Under section CF 3 (10) The assessable withdrawal amount under the schedule method is calculated using the formula—
(super withdrawal − contributions left) ____ schedule year fraction.
x
91
Under section CF 3 (10) The assessable withdrawal amount under the schedule method is calculated using the formula—
(super withdrawal − contributions left) × __________________.
schedule year fraction.
92
Under section CF 3 (10) The assessable withdrawal amount under the schedule method is calculated using the formula—
_______________________________________________
(super withdrawal − contributions left) × schedule year fraction.
93
Example 1
Lisa worked for a few years in Hong Kong and has an interest in her employer’s private superannuation scheme. She moves to New Zealand and, upon her retirement, begins to receive a monthly _______ payment of NZ$500 ($6,000 per year) from the scheme. These payments continue at the same amount (with an increase to account for inflation each year) until her death, at which point they will stop. From these facts, it appears that her monthly payments are a ________. She needs to include $6,000 in her New Zealand tax return each year and pay tax on that amount. If her marginal tax rate is 33%, she will pay tax of $1,980 each yea
TIB Vol 26 No 4
pension
94
Example 1
Lisa worked for a few years in Hong Kong and has an interest in her employer’s private superannuation scheme. She moves to New Zealand and, upon her retirement, begins to receive a monthly pension payment of NZ$500 (________ per year) from the scheme. These payments continue at the same amount (with an increase to account for inflation each year) until her death, at which point they will stop. From these facts, it appears that her monthly payments are a pension. She needs to include ___________ in her New Zealand tax return each year and pay tax on that amount. If her marginal tax rate is 33%, she will pay tax of $1,980 each yea
TIB Vol 26 No 4
$6,000
95
Example 1
Lisa worked for a few years in Hong Kong and has an interest in her employer’s private superannuation scheme. She moves to New Zealand and, upon her retirement, begins to receive a monthly pension payment of NZ$500 ($6,000 per year) from the scheme. These payments continue at the same amount (with an increase to account for inflation each year) until her death, at which point they will stop. From these facts, it appears that her monthly payments are a pension. She needs to include $6,000 in her New Zealand tax return each year and pay tax on that amount. If her marginal tax rate is 33%, she will pay tax of __________each yea
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$1,980
96
Example 3
Kimberley, a New Zealand tax resident, has an interest in a foreign superannuation scheme in Spain that she acquired before migrating to New Zealand. She wants to change providers to get a better investment return, and decides to transfer her funds into another foreign superannuation scheme in France that offers better returns. Under the new rules, Kimberley does not need to pay New Zealand tax on the amount she transfers to the French scheme. Instead, she is taxed when she ____________________________ to a New Zealand superannuation scheme. Her tax liability on the transfer of the French interest into New Zealand takes into account the period of time she held the interest in the Spanish scheme while she was New Zealand-resident, as well as the period she held the French interest before transferring.
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transfers the interest in the French superannuation scheme
97
Example 3
Kimberley, a New Zealand tax resident, has an interest in a foreign superannuation scheme in Spain that she acquired before migrating to New Zealand. She wants to change providers to get a better investment return, and decides to transfer her funds into another foreign superannuation scheme in France that offers better returns. Under the new rules, Kimberley does not need to pay New Zealand tax on the amount she transfers to the French scheme. Instead, she is taxed when she transfers the interest in the French superannuation scheme __________________________. Her tax liability on the transfer of the French interest into New Zealand takes into account the period of time she held the interest in the Spanish scheme while she was New Zealand-resident, as well as the period she held the French interest before transferring.
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to a New Zealand superannuation scheme
98
Example 3
Kimberley, a New Zealand tax resident, has an interest in a foreign superannuation scheme in Spain that she acquired before migrating to New Zealand. She wants to change providers to get a better investment return, and decides to transfer her funds into another foreign superannuation scheme in France that offers better returns. Under the new rules, Kimberley does not need to pay New Zealand tax on the amount she transfers to the French scheme. Instead, she is taxed when she ________________________________________________. Her tax liability on the transfer of the French interest into New Zealand takes into account the period of time she held the interest in the Spanish scheme while she was New Zealand-resident, as well as the period she held the French interest before transferring.
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transfers the interest in the French superannuation scheme to a New Zealand superannuation scheme.
99
Example 3
Kimberley, a New Zealand tax resident, has an interest in a foreign superannuation scheme in Spain that she acquired before migrating to New Zealand. She wants to change providers to get a better investment return, and decides to transfer her funds into another foreign superannuation scheme in France that offers better returns. Under the new rules, Kimberley does not need to pay New Zealand tax on the amount she ____________________. Instead, she is taxed when she transfers the interest in the French superannuation scheme to a New Zealand superannuation scheme. Her tax liability on the transfer of the French interest into New Zealand takes into account the period of time she held the interest in the Spanish scheme while she was New Zealand-resident, as well as the period she held the French interest before transferring.
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transfers to the French scheme
100
Example 4
Mary, her husband Martin, and their son Simon are
all New Zealand tax residents. Mary first acquired an
interest in a United Kingdom superannuation scheme
while she was non-resident.
Mary dies unexpectedly. In her will, Mary transfers half
of her interest in the UK superannuation scheme to
Martin and the other half to Simon, rather than cashing
out the interest and distributing the proceeds.
As Martin is a New Zealand tax resident and Mary’s
surviving spouse, the transfer to him is _________a taxable
event as it meets the requirements for rollover relief
under new section CF 3(3).
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not
101
Example 4
Mary, her husband Martin, and their son Simon are
all New Zealand tax residents. Mary first acquired an
interest in a United Kingdom superannuation scheme
while she was non-resident.
Mary dies unexpectedly. In her will, Mary transfers half
of her interest in the UK superannuation scheme to
Martin and the other half to Simon, rather than cashing
out the interest and distributing the proceeds.
As Martin is a New Zealand tax resident and Mary’s
surviving spouse, the transfer to him is not a taxable
event as it meets the requirements for _______________
under new section CF 3(3).
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rollover relief
102
Example 4
Mary, her husband Martin, and their son Simon are
all New Zealand tax residents. Mary first acquired an
interest in a United Kingdom superannuation scheme
while she was non-resident.
Mary dies unexpectedly. In her will, Mary transfers half
of her interest in the UK superannuation scheme to
Martin and the other half to Simon, rather than cashing
out the interest and distributing the proceeds.
As Martin is a New Zealand tax resident and Mary’s
___________, the transfer to him is rollover relief a taxable
event as it meets the requirements for rollover relief
under new section CF 3(3).
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surviving spouse
103
Mary, her husband Martin, and their son Simon are
all New Zealand tax residents. Mary first acquired an
interest in a United Kingdom superannuation scheme
while she was non-resident.
Mary dies unexpectedly. In her will, Mary transfers half
of her interest in the UK superannuation scheme to
Martin and the other half to Simon, rather than cashing
out the interest and distributing the proceeds.
As Martin is a New Zealand tax resident and Mary’s
surviving spouse, the transfer to him is not a taxable
event as it meets the requirements for rollover relief
under new section CF 3(3).
Ten years later, Martin decides that he wants to transfer
the interest to a New Zealand scheme. This is a taxable
event for Martin under section CF 3(2)(b). Under
section CF 3(21)(d), the amount of the transfer that is
deemed to be assessable income will take into account
how long Mary was New Zealand-resident while ____________ before she died and it was transferred to Martin, as well as how long Martin has owned the
interest.
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Owning the interest
104
Mary, her husband Martin, and their son Simon are
all New Zealand tax residents. Mary first acquired an
interest in a United Kingdom superannuation scheme
while she was non-resident.
Mary dies unexpectedly. In her will, Mary transfers half
of her interest in the UK superannuation scheme to
Martin and the other half to Simon, rather than cashing
out the interest and distributing the proceeds.
As Martin is a New Zealand tax resident and Mary’s
surviving spouse, the transfer to him is not a taxable
event as it meets the requirements for rollover relief
under new section CF 3(3).
Ten years later, Martin decides that he wants to transfer
the interest to a New Zealand scheme. This is a taxable
event for Martin under section CF 3(2)(b). Under
section CF 3(21)(d), the amount of the transfer that is
deemed to be assessable income will take into account
how long Mary was New Zealand-resident while owning
the _________before she died and it was transferred to Martin, as well as how long Martin has owned the ____________.
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Interest
105
In contrast, Simon is not provided _____________
under section CF 3(3) as he is Mary’s son and not a
surviving spouse. This means that when the executor
of Mary’s estate transfers half of Mary’s interest in the
superannuation scheme to Simon, the transfer is a
taxable event under section CF 3(2)(d) and the amount
of the transfer that is deemed to be assessable income
will depend on how long Mary was New Zealand resident
while owning the interest before she died and
transferred it to Simon.
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rollover relief
106
In contrast, Simon is not provided rollover relief
under section CF 3(3) as he is Mary’s son and not a
_____________. This means that when the executor
of Mary’s estate transfers half of Mary’s interest in the
superannuation scheme to Simon, the transfer is a
taxable event under section CF 3(2)(d) and the amount
of the transfer that is deemed to be assessable income
will depend on how long Mary was New Zealand resident
while owning the interest before she died and
transferred it to Simon.
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surviving spouse
107
In contrast, Simon is not provided rollover relief
under section CF 3(3) as he is Mary’s son and not a
surviving spouse. This means that when the executor
of Mary’s estate transfers half of Mary’s interest in the
superannuation scheme to Simon, the transfer is a
taxable event under section CF 3(2)(d) and the amount
of the transfer that is deemed to be assessable income
will depend on how long Mary was New Zealand resident
while owning the interest before she died and
____________ it to Simon.
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transferred
108
From the time that Simon acquires the interest, Simon
has a _________________ as Simon was already
New Zealand-resident when it was transferred to him This means that Simon needs to account for income
on an annual basis under the FIF rules. Five years after
he acquires the interest, Simon decides to transfer the
interest into a New Zealand scheme. Because Simon’s
superannuation interest has been taxed under the FIF
rules, he does not pay any tax on the transfer to the
New Zealand scheme.
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FIF superannuation interest
109
From the time that Simon acquires the interest, Simon
has a FIF superannuation interest as Simon was already
New Zealand-resident when it was transferred to him This means that Simon needs to account for income
on an annual basis under the ____________. Five years after
he acquires the interest, Simon decides to transfer the
interest into a New Zealand scheme. Because Simon’s
superannuation interest has been taxed under the FIF
rules, he does not pay any tax on the transfer to the
New Zealand scheme.
FIF rules
110
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From the time that Simon acquires the interest, Simon
has a FIF superannuation interest as Simon was already
New Zealand-resident when it was transferred to him This means that Simon needs to account for income
on an annual basis under the FIF rules. Five years after
he acquires the interest, Simon decides to transfer the
interest into a New Zealand scheme. Because Simon’s
superannuation interest has been taxed under the FIF
rules, he ______________ on the transfer to the
New Zealand scheme.
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does not pay any tax
111
The exemption period is similar to the four-year tax-free
window provided by the pre-existing “transitional resident
rules” in section HR 8 of the Income Tax Act 2007. People
who are transitional residents are generally not subject
to tax on foreign income during the first four years of
New Zealand tax residence.
Unlike the transitional resident rules, section CF 3(5) does
not require a person to be non-tax resident for a minimum
period in order to qualify for an exemption period. The
exemption period is thus available to new migrants and
returning New Zealanders alike (as long as they satisfy the
overall requirement for section CF 3 that the interest in the
foreign superannuation was first acquired while non-tax
resident).
Also, _____________ the transitional resident rules, it is not possible
to opt out of the exemption period.
unlike
112
window provided by the pre-existing “transitional resident
rules” in section HR 8 of the Income Tax Act 2007. People
who are transitional residents are generally not subject
to tax on foreign income during the first four years of
New Zealand tax residence.
Unlike the transitional resident rules, section CF 3(5) does
not require a person to be non-tax resident for a minimum
period in order to qualify for an exemption period. The
exemption period is thus available to new migrants and
returning New Zealanders alike (as long as they satisfy the
overall requirement for section CF 3 that the interest in the
foreign superannuation was first acquired while non-tax
resident).
Also, unlike _____________________, it is not possible
to opt out of the exemption period.
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transitional resident rules
113
window provided by the pre-existing “transitional resident
rules” in section HR 8 of the Income Tax Act 2007. People
who are transitional residents are generally not subject
to tax on foreign income during the first four years of
New Zealand tax residence.
Unlike the transitional resident rules, section CF 3(5) does
not require a person to be non-tax resident for a minimum
period in order to qualify for an exemption period. The
exemption period is thus available to new migrants and
returning New Zealanders alike (as long as they satisfy the
overall requirement for section CF 3 that the interest in the
foreign superannuation was first acquired while non-tax
resident).
Also, unlike the transitional resident rules, it is not possible
to _____________ of the exemption period.
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opt out
114
window provided by the pre-existing “transitional resident
rules” in section HR 8 of the Income Tax Act 2007. People
who are transitional residents are generally not subject
to tax on foreign income during the first four years of
New Zealand tax residence.
Unlike the transitional resident rules, section CF 3(5) does
not require a person to be non-tax resident for a minimum
period in order to qualify for an exemption period. The
exemption period is thus available to new migrants and
returning New Zealanders alike (as long as they satisfy the
overall requirement for section CF 3 that the interest in the
foreign superannuation was first acquired while non-tax
resident).
Also, unlike the transitional resident rules, it is not possible
to opt out of ___________________________.
the exemption period
115
window provided by the pre-existing “transitional resident
rules” in section HR 8 of the Income Tax Act 2007. People
who are transitional residents are generally not subject
to tax on foreign income during the first four years of
New Zealand tax residence.
Unlike the transitional resident rules, section CF 3(5) does
not require a person to be non-tax resident for a minimum
period in order to qualify for an exemption period. The
exemption period is thus available to new migrants and
returning New Zealanders alike (as long as they satisfy the
overall requirement for section CF 3 that the interest in the
foreign superannuation was first acquired while non-tax
resident).
Also, unlike the transitional resident rules, it is not possible
________________________.
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to opt out of the exemption period
116
Clearly lifestyle properties would also not be able to apply the ________________. Instead the principle residence exemption would need to be applied. This exemption, known as the main home exemption, exempts from the rule any property that is used as the principle residence of the owner. It is important to note that this exemption can only be used twice in a two year period
https://www.cooperaitken.co.nz/wp-content/uploads/2017/10/the_balance_sheet_Sept_2017-FINAL-2.pdf
farming exemption
117
Clearly lifestyle properties would also not be able to apply the farming exemption. Instead the _________________ would need to be applied. This exemption, known as the main home exemption, exempts from the rule any property that is used as the principle residence of the owner. It is important to note that this exemption can only be used twice in a two year period
https://www.cooperaitken.co.nz/wp-content/uploads/2017/10/the_balance_sheet_Sept_2017-FINAL-2.pdf
principle residence exemption
118
Clearly lifestyle properties would also not be able to apply the farming exemption. Instead the principle residence exemption would need to be applied. This exemption, known as the ___________, exempts from the rule any property that is used as the principle residence of the owner. It is important to note that this exemption can only be used twice in a two year period
https://www.cooperaitken.co.nz/wp-content/uploads/2017/10/the_balance_sheet_Sept_2017-FINAL-2.pdf
main home exemption
119
Clearly lifestyle properties would also not be able to apply the farming exemption. Instead the principle residence exemption would need to be applied. This exemption, known as the main home exemption, exempts from the rule any property that is used as the ___________________. It is important to note that this exemption can only be used twice in a two year period
https://www.cooperaitken.co.nz/wp-content/uploads/2017/10/the_balance_sheet_Sept_2017-FINAL-2.pdf
principle residence of the owner
120
In addition, a person who receives _________________________ still receives a full exemption period in relation to
their foreign superannuation interest.
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Working for Families tax credits
121
In addition, a person who receives Working for Families tax
credits still receives a __________________ in relation to
their foreign superannuation interest.
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full exemption period
122
In addition, a person who receives Working for Families tax
credits still receives a full exemption period in relation to
their ___________________________.
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foreign superannuation interest
123
New sections CF 3(4)(b) and CW 28C provide that the part
of the lump sum that is not treated as assessable income
under the schedule method or formula method is ________________. The ______________ is not taken into account for
student loan or Working for Families tax credit purposes.
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Exempt income
124
New sections CF 3(4)(b) and CW 28C provide that the part
of the lump sum that is not treated as assessable income
under the schedule method or formula method is exempt
income. The exempt income is not taken into account for
_________________ or Working for Families tax credit purposes.
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student loan
125
New sections CF 3(4)(b) and CW 28C provide that the part
of the lump sum that is not treated as assessable income
under the schedule method or formula method is exempt
income. The exempt income is not taken into account for
student loan or _____________________ purposes.
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Working for Families tax credit
126
To be eligible to use the formula method the individual
must meet several criteria in relation to the interest.
First, the foreign superannuation scheme must be a foreign
defined contribution scheme for which a person has
______________ about the value of the scheme and
contributions made. A foreign defined contribution scheme
is defined in section YA 1 as a foreign superannuation scheme
that operates on the principle of allocating contributions to
the scheme on a defined basis to individual members.
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sufficient information
127
To be eligible to use the formula method the individual
must meet several criteria in relation to the interest.
First, the foreign superannuation scheme must be a foreign
defined contribution scheme for which a person has
sufficient information about the __________ of the scheme and
contributions made. A foreign defined contribution scheme
is defined in section YA 1 as a foreign superannuation scheme
that operates on the principle of allocating contributions to
the scheme on a defined basis to individual members.
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value of the scheme
128
To be eligible to use the formula method the individual
must meet several criteria in relation to the interest.
First, the foreign superannuation scheme must be a foreign
defined contribution scheme for which a person has
sufficient information about the value of the scheme and
____________. A foreign defined contribution scheme
is defined in section YA 1 as a foreign superannuation scheme
that operates on the principle of allocating contributions to
the scheme on a defined basis to individual members.
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contributions made
129
To be eligible to use the formula method the individual
must meet several criteria in relation to the interest.
In addition, a person must not have used the ____________ for a past lump sum received from that particular
interest, and must not have received a withdrawal (other
than a pension or an annuity) before 1 April 2014.
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Schedule method
130
To be eligible to use the formula method the individual
must meet several criteria in relation to the interest.
In addition, a person must not have used the schedule
method for a ________________ received from that particular
interest, and must not have received a withdrawal (other
than a pension or an annuity) before 1 April 2014.
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past lump sum
131
To be eligible to use the formula method the individual
must meet several criteria in relation to the interest.
In addition, a person must not have used the schedule
method for a past lump sum received from that particular
interest, and must not have _______________ (other
than a pension or an annuity) before 1 April 2014.
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received a withdrawal
132
To be eligible to use the formula method the individual
must meet several criteria in relation to the interest.
In addition, a person must not have used the schedule
method for a past lump sum received from that particular
interest, and must not have received a withdrawal (other
than a pension or an annuity) before _________________.
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before 1 April 2014
133
If the
person received their interest from a spouse, civil union
partner, or de facto partner, in a transaction referred to in
section CF 3(21)(d), another condition is that the person
who _______________ did not use the schedule
method in relation to the interest
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originally held the interest
134
If the
person received their interest from a spouse, civil union
partner, or de facto partner, in a transaction referred to in
section CF 3(21)(d), another condition is that the person
who originally held the interest _______________ in relation to the interest
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did not use the schedule method
135
Section __________________ of the ITA refers to someone acquiring the rights as a surviving spouse, civil union partner or defacto partner or as a former spouse, civil union partner or defacto partner.
CF 3 (21) (d)
136
Section CF 3 (21) (d) of the ITA refers to someone acquiring the rights as a ________________, civil union partner or defacto partner or as a former spouse, civil union partner or defacto partner.
surviving spouse
137
Section CF 3 (21) (d) of the ITA refers to someone acquiring the rights as a surviving spouse, civil union partner or defacto partner or as a _____________, civil union partner or defacto partner.
former spouse
138
The tax liability arising under the ______________
essentially depends on how long the person has been a
New Zealand tax resident. It is calculated using the number
of income years beginning in the person’s assessable period.
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schedule method
139
The tax liability arising under the schedule method
essentially depends on how long the person has been a
__________________. It is calculated using the number
of income years beginning in the person’s assessable period.
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New Zealand tax resident
140
The interest factor in the _____________ method is calculated
using a person’s years of tax residence.
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formula
141
The ______________ in the formula method is calculated
using a person’s years of tax residence.
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interest factor
142
The interest factor in the formula method is calculated
using a person’s ________________.
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years of tax residence
143
If the person has a four-year exemption period in relation to
their foreign superannuation interest (as described above),
their assessable period for that foreign superannuation
interest begins ______________ the exemption period ends. This
is provided for in new section CF 3(8)(a)(ii).
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as soon as
144
If the person has a four-year exemption period in relation to
their foreign superannuation interest (as described above),
their assessable period for that foreign superannuation
interest begins as soon as the __________________. This
is provided for in new section CF 3(8)(a)(ii).
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exemption period ends
145
If the person has a four-year exemption period in relation to
their foreign superannuation interest (as described above),
their assessable period for that foreign superannuation
interest begins ________________________. This
is provided for in new section CF 3(8)(a)(ii).
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as soon as the exemption period ends
146
It is possible that a person could migrate to New Zealand
with a foreign superannuation interest, lose their
New Zealand tax residence, and then become tax resident
again. New Zealand does not generally aim to tax foreign sourced
income derived by non-tax residents. To ensure
that the schedule and formula methods do not contradict
this principle, new section CF 3(8)(c) provides that the
__________________ excludes periods of non-tax residence.
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assessable period
147
It is possible that a person could migrate to New Zealand
with a foreign superannuation interest, lose their
New Zealand tax residence, and then become tax resident
again. New Zealand does not generally aim to tax foreign sourced
income derived by non-tax residents. To ensure
that the schedule and formula methods do not contradict
this principle, new section CF 3(8)(c) provides that the
assessable period _____________ periods of non-tax residence.
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excludes
148
It is possible that a person could migrate to New Zealand
with a foreign superannuation interest, lose their
New Zealand tax residence, and then become tax resident
again. New Zealand does not generally aim to tax foreign sourced
income derived by non-tax residents. To ensure
that the schedule and formula methods do not contradict
this principle, new section CF 3(8)(c) provides that the
assessable period excludes ___________________.
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periods of non-tax residence
149
It is possible that a person could migrate to New Zealand
with a foreign superannuation interest, lose their
New Zealand tax residence, and then become tax resident
again. New Zealand does not generally aim to tax foreign sourced
income derived by non-tax residents. To ensure
that the schedule and formula methods do not contradict
this principle, new section CF 3(8)(c) provides that the
________________________________________________.
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assessable period excludes periods of non-tax residence.
150
Example 6
Brian’s exemption period ends on 30 September 2015.
His assessable period begins on _______________. Brian
leaves New Zealand and his last day as a New Zealand tax
resident is 27 March 2022. He becomes a New Zealand
tax resident again on 1 August 2027. Brian receives a
lump sum from his foreign superannuation scheme on
5 February 2029.
Brian’s assessable period is from 1 October 2016 until
5 February 2029, but excludes the period 28 March 2022
to 31 July 2027 (which is when he was non-resident).
1 October 2015
151
Example 6
Brian’s exemption period ends on 30 September 2015.
His assessable period begins on 1 October 2015. Brian
leaves New Zealand and his last day as a New Zealand tax
resident is 27 March 2022. He becomes a New Zealand
tax resident again on 1 August 2027. Brian receives a
lump sum from his foreign superannuation scheme on
5 February 2029.
Brian’s assessable period is from 1 October 2016 until
5 February _____, but excludes the period 28 March 2022
to 31 July 2027 (which is when he was non-resident).
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2029
152
Brian’s exemption period ends on 30 September 2015.
His assessable period begins on 1 October 2015. Brian
leaves New Zealand and his last day as a New Zealand tax
resident is 27 March 2022. He becomes a New Zealand
tax resident again on 1 August 2027. Brian receives a
lump sum from his foreign superannuation scheme on
5 February 2029.
Brian’s assessable period is from 1 October 2016 until
5 February 2029, but _____________ the period 28 March 2022
to 31 July 2027 (which is when he was non-resident).
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excludes
153
The “_________________________” item in the formula for the schedule method, is a deduction
for contributions made for or on behalf of a person
while the person is a New Zealand tax resident, if the
contributions satisfy certain conditions. The schedule
method may otherwise treat some of the New Zealand
contributions as gains would result in over-taxation.
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contributions left
154
The “contributions left” item in the formula for the schedule method, is a deduction
for ____________________ for or on behalf of a person
while the person is a New Zealand tax resident, if the
contributions satisfy certain conditions. The schedule
method may otherwise treat some of the New Zealand
contributions as gains would result in over-taxation.
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contributions made
155
The “contributions left” item in the formula for the schedule method, is a deduction
for contributions made for or on behalf of a person
______________________________, if the
contributions satisfy certain conditions. The schedule
method may otherwise treat some of the New Zealand
contributions as gains would result in over-taxation.
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while the person is a New Zealand tax resident
156
New section CF 3(19) provides that all of the following
conditions must be met:
• at the time the contribution is made, the person must be
a New Zealand resident under section YD 1 and treated
as a New Zealand resident under all applicable double tax agreements;
• the contribution is made by the person, or the person’s
employer, or for the benefit of the person;
• the contribution _________________ under the rules of
the foreign superannuation scheme (that is, voluntary
contributions cannot be deducted); and
• employer contributions must be subject to employer
superannuation contribution tax or fringe benefit tax.
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must be required
157
New section CF 3(19) provides that all of the following
conditions must be met:
• at the time the contribution is made, the person must be
a New Zealand resident under section YD 1 and treated
as a New Zealand resident under all applicable double tax agreements;
• the contribution is made by the person, or the person’s
employer, or for the benefit of the person;
• the contribution must be required under the ___________________________ (that is, voluntary
contributions cannot be deducted); and
• employer contributions must be subject to employer
superannuation contribution tax or fringe benefit tax.
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rules of the foreign superannuation scheme
158
New section CF 3(19) provides that all of the following
conditions must be met:
• at the time the contribution is made, the person must be
a New Zealand resident under section YD 1 and treated
as a New Zealand resident under all applicable double tax agreements;
• the contribution is made by the person, or the person’s
employer, or for the benefit of the person;
• the contribution must be required under the rules of
the foreign superannuation scheme (that is, _________________________); and
• employer contributions must be subject to employer
superannuation contribution tax or fringe benefit tax.
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Voluntary contributions cannot be deducted
159
New section CF 3(19) provides that all of the following
conditions must be met:
• at the time the contribution is made, the person must be
a New Zealand resident under section YD 1 and treated
as a New Zealand resident under all applicable double tax agreements;
• the contribution is made by the person, or the person’s
employer, or for the benefit of the person;
• the contribution must be required under the rules of
the foreign superannuation scheme (that is, voluntary
contributions cannot be deducted); and
• employer contributions must be subject to ___________________________.
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Employer superannuation contribution tax or fringe benefit tax
160
The fractions in new schedule _____ are set at the rate
necessary to put a person who leaves their foreign
superannuation overseas in the same position as if they had
instead transferred their superannuation to New Zealand
when they first became tax-resident and paid tax on
investment gains as they accrued in a KiwiSaver or bank
account, for example.
TIB Vol 26 No 4
33
161
Contributions that can be deducted are restricted in this
manner because the schedule rates already include an
______________________ for contributions. For example, for the
year one schedule rate, 4.76% of the withdrawal is treated
as taxable New Zealand-sourced gains and the remainder is
treated as non-taxable. The non-taxable portion includes
contributions as well as gains derived while non-resident.
TIB Vol 26 No 4
implicit allowance
162
Contributions that can be deducted are restricted in this
manner because the schedule rates already include an
implicit allowance ___________________. For example, for the
year one schedule rate, 4.76% of the withdrawal is treated
as taxable New Zealand-sourced gains and the remainder is
treated as non-taxable. The non-taxable portion includes
contributions as well as gains derived while non-resident.
TIB Vol 26 No 4
for contributions
163
Contributions that can be deducted are restricted in this
manner because the schedule rates already include an
____________________________. For example, for the
year one schedule rate, 4.76% of the withdrawal is treated
as taxable New Zealand-sourced gains and the remainder is
treated as non-taxable. The non-taxable portion includes
contributions as well as gains derived while non-resident.
TIB Vol 26 No 4
implicit allowance for contributions
164
Contributions that can be deducted are restricted in this
manner because the schedule rates already include an
implicit allowance for contributions. For example, for the
year one schedule rate, 4.76% of the withdrawal is treated
as taxable New Zealand-sourced gains and the remainder is
treated as non-taxable. The non-taxable portion includes
_________________ as well as gains derived while non-resident.
contributions
165
Contributions that can be deducted are restricted in this
manner because the schedule rates already include an
implicit allowance for contributions. For example, for the
year one schedule rate, 4.76% of the withdrawal is treated
as taxable New Zealand-sourced gains and the remainder is
treated as non-taxable. The non-taxable portion includes
contributions as well as ________________________.
gains derived while non-resident
166
After a period spent working overseas, Dan returned
to New Zealand with an interest in a foreign
superannuation scheme and acquired a permanent
place of abode on 28 June 2012. Dan’s exemption period
begins on 28 June 2012 and ends on 30 June 2016. Dan’s
assessable period starts on _____________.
He withdraws a lump sum of $50,000 on 27 January
2020. There are three income years that begin in Dan’s
assessable period: the years beginning 1 April 2017 (2018
income year), 1 April 2018 (2019 income year), and
1 April 2019 (2020 income year).
Dan is therefore required to use the schedule year
fraction for year three. The corresponding schedule
year fraction is 14.06%, so his assessable income is $7,030
(being $50,000 × 14.06%).
Dan includes $7,030 as income in his 2020 income tax
return. His marginal tax rate is applied to this amount,
rather than the full amount of the lump-sum withdrawal
TIB Vol 26 No 4
1 July 2016
167
After a period spent working overseas, Dan returned
to New Zealand with an interest in a foreign
superannuation scheme and acquired a permanent
place of abode on 28 June 2012. Dan’s exemption period
begins on 28 June 2012 and ends on 30 June 2016. Dan’s
assessable period starts on 1 July 2016.
He withdraws a lump sum of $50,000 on 27 January
2020. There are three income years that begin in Dan’s
assessable period: the years beginning ____________ (2018
income year), 1 April 2018 (2019 income year), and
1 April 2019 (2020 income year).
Dan is therefore required to use the schedule year
fraction for year three. The corresponding schedule
year fraction is 14.06%, so his assessable income is $7,030
(being $50,000 × 14.06%).
Dan includes $7,030 as income in his 2020 income tax
return. His marginal tax rate is applied to this amount,
rather than the full amount of the lump-sum withdrawal
TIB Vol 26 No 4
1 April 2017
168
After a period spent working overseas, Dan returned
to New Zealand with an interest in a foreign
superannuation scheme and acquired a permanent
place of abode on 28 June 2012. Dan’s exemption period
begins on 28 June 2012 and ends on 30 June 2016. Dan’s
assessable period starts on 1 July 2016.
He withdraws a lump sum of $50,000 on 27 January
2020. There are three income years that begin in Dan’s
assessable period: the years beginning 1 April 2017 (2018
income year), 1 April 2018 (2019 income year), and
1 April 2019 (2020 income year).
Dan is therefore required to use the schedule year
fraction for year ___________. The corresponding schedule
year fraction is 14.06%, so his assessable income is $7,030
(being $50,000 × 14.06%).
Dan includes $7,030 as income in his 2020 income tax
return. His marginal tax rate is applied to this amount,
rather than the full amount of the lump-sum withdrawal
TIB Vol 26 No 4
three
169
If the number of income years beginning in a person’s
assessable period is zero when a person receives a lump sum
(that is, they receive the lump sum during the part-year in
which their __________________ starts but before the start of
the next income year), the person should use the schedule
year fraction associated with year one.
TIB Vol 26 No 4
assessable period
170
If the number of income years beginning in a person’s
assessable period is zero when a person receives a lump sum
(that is, they receive the lump sum during the part-year in
which their assessable period starts but before the start of
the _______________), the person should use the schedule
year fraction associated with year one.
TIB Vol 26 No 4
next income year
171
If the number of income years beginning in a person’s
assessable period is zero when a person receives a lump sum
(that is, they receive the lump sum during the part-year in
which their assessable period starts but before the start of
the next income year), the person should use the schedule
year fraction associated with ___________.
TIB Vol 26 No 4
year one
172
Example 10
Melanie’s assessable period begins on 1 October 2014.
She withdraws a lump sum of $50,000 on 5 February
2015, which means that an income year has not yet
started during her assessable period.
Melanie is required to use the schedule year fraction for
____________ because the withdrawal was made between
1 October 2014 and 31 March 2015. The corresponding
schedule fraction is 4.76%, so her assessable income is
$2,380 (being $50,000 × 4.76%). Assuming Melanie’s tax
rate is 33% (which is the top personal marginal tax rate
for the 2014–15 income year), she is liable to pay $785.40
of tax on her $50,000 lump-sum withdrawal.
TIB Vol 26 No 4
year one
173
Example 11
Ruby migrated to New Zealand with an interest in
a foreign superannuation scheme and became a
New Zealand tax resident on 25 November 2008 when
she obtained a permanent place of abode. Her exemption
period is 25 November 2008 to 30 November 2012 and
her assessable period begins on 1 December 2012.
On 6 May 2018, Ruby transfers her foreign superannuation
scheme into a New Zealand scheme and the transfer
equates to $100,000.
Ruby has been treated as New Zealand-resident under all
applicable double tax agreements since early 2009.
The rules of Ruby’s foreign superannuation scheme
require that she continues to contribute a certain
amount to the scheme each year. The amount she is
required to contribute during her exemption period
amounts to $2,000. The amount she is required to
contribute during her assessable period before the
transfer is $3,000. Ruby decides to contribute an
additional $500 to the scheme during her assessable
period, which was not required by the scheme.
Ruby uses the schedule method to calculate how much
of her transfer she needs to include in her 2019 income
tax return.
Ruby’s assessable period in relation to the transfer is
1 December 2012 to 6 May 2018. The number of income
years beginning in her assessable period is six, so Ruby
must use the schedule year fraction of 27.47%.
The $2,000 of contributions made during her exemption
period are ____________ as one of the requirements for
a contribution to be deductible is that they are made
during the assessable period before the distribution
time. The $3,000 of contributions are deductible as
they meet the requirements in sections CF 3(11)(b) and
CF 3(19) that they were made during Ruby’s assessable
period, they were required by the rules of the scheme,
they were made by Ruby, and Ruby was treated as a
New Zealand tax resident under all applicable double tax
agreements when they were made. The additional $500
she contributed is not deductible as it was a voluntary
contribution.
Ruby calculates her assessable withdrawal amount as
follows:
($100,000 − $3,000) × 27.47% = $26,645.90
Ruby includes $26,645.90 as income in her 2019 income
tax return and pays tax at her marginal tax rate on this amount.
TIB Vol 26 No 4
not deductible
174
Example 11
Ruby migrated to New Zealand with an interest in
a foreign superannuation scheme and became a
New Zealand tax resident on 25 November 2008 when
she obtained a permanent place of abode. Her exemption
period is 25 November 2008 to 30 November 2012 and
her assessable period begins on 1 December 2012.
On 6 May 2018, Ruby transfers her foreign superannuation
scheme into a New Zealand scheme and the transfer
equates to $100,000.
Ruby has been treated as New Zealand-resident under all
applicable double tax agreements since early 2009.
The rules of Ruby’s foreign superannuation scheme
require that she continues to contribute a certain
amount to the scheme each year. The amount she is
required to contribute during her exemption period
amounts to $2,000. The amount she is required to
contribute during her assessable period before the
transfer is $3,000. Ruby decides to contribute an
additional $500 to the scheme during her assessable
period, which was not required by the scheme.
Ruby uses the schedule method to calculate how much
of her transfer she needs to include in her 2019 income
tax return.
Ruby’s assessable period in relation to the transfer is
1 December 2012 to 6 May 2018. The number of income
years beginning in her assessable period is six, so Ruby
must use the schedule year fraction of 27.47%.
The $2,000 of contributions made during her exemption
period are not deductible as one of the requirements for
a contribution to be deductible is that they are made
during the ________________ before the distribution
time. The $3,000 of contributions are deductible as
they meet the requirements in sections CF 3(11)(b) and
CF 3(19) that they were made during Ruby’s assessable
period, they were required by the rules of the scheme,
they were made by Ruby, and Ruby was treated as a
New Zealand tax resident under all applicable double tax
agreements when they were made. The additional $500
she contributed is not deductible as it was a voluntary
contribution.
Ruby calculates her assessable withdrawal amount as
follows:
($100,000 − $3,000) × 27.47% = $26,645.90
Ruby includes $26,645.90 as income in her 2019 income
tax return and pays tax at her marginal tax rate on this amount.
TIB Vol 26 No 4
assessable period
175
To use the formula method, a person is required to obtain
The _________________ of the foreign superannuation interest at
the time the exemption period ends, as well as information
about contributions made and other necessary information.
Requirements relating to the quality of information also apply
TIB Vol 26 No 4
| market value
176
To use the formula method, a person is required to obtain
the market value of the ________________________ at
the time the exemption period ends, as well as information
about contributions made and other necessary information.
Requirements relating to the quality of information also apply.
TIB Vol 26 No 4
foreign superannuation interest
177
To use the formula method, a person is required to obtain
the ________________________________ at
the time the exemption period ends, as well as information
about contributions made and other necessary information.
Requirements relating to the quality of information also apply.
TIB Vol 26 No 4
market value of the foreign superannuation interest
178
To use the formula method, a person is required to obtain
the market value of the foreign superannuation interest at
the time the __________________, as well as information
about contributions made and other necessary information.
Requirements relating to the quality of information also apply.
TIB Vol 26 No 4
exemption period ends
179
To use the formula method, a person is required to obtain
the market value of the foreign superannuation interest at
the time the exemption period ends, as well as information
about ______________ and other necessary information.
Requirements relating to the quality of information also apply.
TIB Vol 26 No 4
contributions made
180
The necessary calculations for the ___________ begin
with new section CF 3(12):
distributed gain = (super withdrawal × calculated gains
fraction) − other gains
Vol 26 No 4
formula method
181
The necessary calculations for the formula method begin
with new section __________:
distributed gain = (super withdrawal × calculated gains
fraction) − other gains
Vol 26 No 4
CF 3(12)
182
The necessary calculations for the formula method begin
with new section CF 3(12):
_______________________ = (super withdrawal × calculated gains
fraction) − other gains
Vol 26 No 4
distributed gain
183
The necessary calculations for the formula method begin
with new section CF 3(12):
distributed gain ___ (super withdrawal × calculated gains
fraction) − other gains
Vol 26 No 4
=
184
The necessary calculations for the formula method begin
with new section CF 3(12):
distributed gain = (___________________× calculated gains
fraction) − other gains
Vol 26 No 4
super withdrawal
185
The necessary calculations for the formula method begin
with new section CF 3(12):
distributed gain = (super withdrawal × calculated gains
fraction) − other gains
Vol 26 No 4
×
186
The necessary calculations for the formula method begin
with new section CF 3(12):
distributed gain = (super withdrawal × ___________________) − other gains
Vol 26 No 4
calculated gains fraction
187
The necessary calculations for the formula method begin
with new section CF 3(12):
distributed gain = (super withdrawal × calculated gains fraction) ___ other gains
Vol 26 No 4
-
188
The necessary calculations for the formula method begin with new section CF 3(12):
distributed gain = (super withdrawal × calculated gains fraction) – _________________.
Vol 26 No 4
other gains
189
The necessary calculations for the formula method begin with new section CF 3(12):
distributed gain = (______________________________) – other gains.
Vol 26 No 4
super withdrawal × calculated gains fraction
190
The necessary calculations for the formula method begin with new section CF 3(12):
__________________________________________________.
Vol 26 No 4
distributed gain = (super withdrawal × calculated gains fraction) – other gains.
