In this episode of Trusted Insights, Partner Aimee Mitchell is joined by Tax Partner Andrew Ryan, to discuss the complexities of New Zealand’s tax system for new migrants, particularly those entering under the Active Investor Plus (AIP) visa. They explore key thresholds for tax residency, transitional reliefs, offshore investment rules, and practical steps migrants can take to manage their tax obligations.
[01:09] Andrew introduces the fundamentals of New Zealand’s tax system, describing it as a “broad-based, low-rate” regime. Andrew highlights the absence of capital gains tax, stamp duty, wealth tax, inheritance tax, and gift duty making it relatively simple compared to other jurisdictions. The system primarily comprises income tax and a 15% goods and services tax (GST)
[01:56] Aimee and Andrew discuss the implications of the AIP visa’s low physical presence requirement. Andrew explains that tax residency is triggered by either spending more than 183 days in New Zealand within a rolling 12-month period or establishing a “permanent place of abode.” Migrants who avoid these thresholds may not be considered tax residents.
[03:20] Andrew outlines the benefits of transitional tax residency, which applies for the first four years of New Zealand tax residency. During this period, offshore income, such as dividends, bond income, and capital gains, is exempt from New Zealand tax, allowing migrants time to restructure their financial affairs.
[03:50] The conversation turns to double tax agreements. Andrew reassures listeners that New Zealand’s extensive treaty network helps prevent double taxation, determining which country has taxing rights when individuals are dual residents.
[05:18] Andrew explains the Foreign Investment Fund (FIF) rules, which tax deemed income from offshore portfolio investments. Typically, 5% of the market value of such holdings is treated as taxable income annually for New Zealand residents.
[05:36] Aimee asks about upcoming changes to the FIF rules. Andrew shares that a bill before Parliament proposes a new realisation-based method for taxing offshore shares held by new migrants. Under this method, tax is deferred until the shares are sold, with 70% of the gain being taxable. This change is expected to be retrospective from 1 April 2025 and will apply to both listed and unlisted shares, including those held by US citizens
[06:36] Andrew discusses how the new rules align better with international norms, making it easier to claim tax credits under double tax agreements. This is particularly relevant for migrants from jurisdictions like the US, where citizenship-based taxation applies.
[07:07] The treatment of foreign superannuation schemes is addressed. Andrew notes that withdrawals are taxable in New Zealand, but a four-year exemption applies if funds are transferred within that period. He advises early planning and professional advice to avoid complications.
[08:01] For migrants wishing to avoid New Zealand tax residency, Andrew emphasises the importance of tracking days spent in the country and avoiding the establishment of a permanent place of abode. He explains that even part-days count toward the 183-day threshold and that personal connections, such as joining clubs or enrolling children in school, can trigger residency.
[09:31] Andrew concludes by stressing the importance of early tax advice. Navigating both New Zealand’s tax regime and offshore obligations can be complex, and professional guidance is essential to ensure compliance and optimise outcomes.
Information in this episode is accurate as at the date of recording, 11 September 2025.
For legal advice and guidance on any of the topics discussed, please contact Aimee Mitchell or our Private Wealth team or Andrew Ryan or our Tax team.
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