tax advice to
UK migrants &
returning New
Zealanders

What Sterling Tax Offers

TAX COMPLIANCE

Tax compliance consists of ensuring that clients meet their ongoing tax obligations and this can include:

  • Preparation and submission of all types of UK and New Zealand income tax returns on behalf clients; and
  • UK inheritance tax compliance.
TAX PLANNING
  • General advice to people planning to emigrate to New Zealand or to the UK;
  • Specific transactional advice;
  • Cross-border issues relating to individuals and trusts; and
  • Advice to other professionals in the UK or New Zealand.
PENSION AND RETIREMENT PLANNING

Anyone migrating from the UK to New Zealand needs to understand the effect this will have on their pension planning.  UK pension funds can be transferred to Qualifying Recognised Overseas Pension Schemes (QROPSs) anywhere in the world. There are a number of such schemes in New Zealand but the decision whether or not to transfer and, if so, where to transfer is a complex one. The pensions landscape in the UK has been changing continuously since 2006 and so have the rules relating to QROPSs.

Retirement planning is often something that people pay insufficient attention to.  A good authorised financial adviser is recommended for anyone with a large pension fund but a more general retirement plan might be the first step on that road.

TRUST AND ESTATE PLANNING

Trusts
The establishment of trusts in New Zealand has evolved within a similar legal framework to the UK. This is due to the fact that much of the law of trusts is derived from UK law.

However, the taxation of trusts in both countries is very different and can create some significant tax problems for the unwary. This is an area which needs careful management both from an income tax, capital gains tax and UK inheritance tax point of view.

Estates
Whilst UK inheritance tax (IHT) will not be an issue for most UK migrants or returning New Zealanders, it can be an ongoing issue for many high net worth individuals who retain significant assets in the UK.

The charge to IHT depends on a person’s domicile and it is not always clear whether a person is domiciled in the UK or domiciled elsewhere. Furthermore, the scope of IHT includes UK assets held by non-UK domiciled individuals – so even where a person is non-UK domiciled this does not necessarily mean that they will avoid IHT. There are, however, ways to reduce significantly a person’s exposure to IHT.

GENERAL FINANCIAL ADVICE

It is easy to let the ‘tax tail wag the dog’. In other words, it is important to recognise that concentrating too much on tax savings might be detrimental to a client’s overall financial position. It is more important to make the best overall financial decision rather than the maximum tax savings.

The American Oliver Wendell Holmes is reported to have said that ‘taxes are the price we pay for a civilised society’. There is no doubt that sometimes tax can be the inevitable result of financial success but equally sometimes it can be the result of financial mismanagement.

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