UK Pension Transfers To New Zealand QROPS – Tax Rates

Category: Uncategorized

People that consider migrating (or returning) to New Zealand from the UK, who are members of UK personal or employer sponsored pension schemes, often speak to Global QROPS Ltd regarding the best retirement planning advice regarding their pensions.

For all members of UK pension schemes, the QROPS (Qualifying Recognized Overseas Pension Scheme) transfer option is available.

If you transfer your UK personal or employer pension to a New Zealand QROPS, and you are a resident of New Zealand at retirement, those benefits would be paid to you tax free.

What happens, however, if you are resident of New Zealand and decide not to exercise the QROPS option and take your retirement benefits directly from a UK scheme?

If you are not entitled to the ‘new or returning resident’s tax exemption’ in New Zealand, (or the exemption period has expired) any payments made from a UK scheme would be taxed at a New Zealand resident’s highest marginal rate.

The basic tax rates in New Zealand (for tax year 2009/10) are banded as follows:

0 – NZ$14,000 @ 12.5%
NZ$14,001 – NZ$48,000 @ 21%
NZ$48,001 – NZ$70,000 @ 33%
NZ$70,000 and over @ 38%

If you are considering a move to New Zealand and you are thinking about taking retirement benefits directly from your UK scheme, you should speak to Global QROPS Ltd first. If you take your benefits in the form of an annuity or final salary pension, you can not transfer your benefits to a New Zealand QROPS and you would have lost the option to receive your pension benefits tax free.