When you consider leaving New Zealand for good, a mix of emotions often surfaces. Many Kiwis choose to embark on this journey for various reasons.
Whether it’s the allure of new experiences, job opportunities, or simply a change of scenery, leaving New Zealand for good requires careful planning, especially on the financial front.
If you have any questions or want to invest as an expat or high-net-worth individual, you can email me (advice@adamfayed.com) or use these contact options.
Table of Contents
Financial Preparations Before Departure
Ensuring your finances are in order before leaving New Zealand for good is paramount. This involves understanding both your banking and tax obligations.
Closing or maintaining bank accounts in New Zealand
Deciding on the status of your Kiwi bank account is a crucial step when leaving New Zealand for good. Retaining a bank account in New Zealand facilitates any local transactions you might need to execute, even from overseas.
However, international banking fees can quickly accumulate, so it’s essential to know these potential costs. Conversely, if you opt to close your account, it reduces the financial responsibilities you must oversee from abroad.
International Banking Fees
Banks often charge fees for international transactions, including currency conversion and overseas ATM withdrawals. Before leaving New Zealand for good, research your bank’s fee structure for international operations to avoid any unexpected charges.
Understanding New Zealand’s tax obligations
Your decision to leave New Zealand for good has certain tax implications. Your tax residency status, distinct from your immigration status, determines your tax obligations in New Zealand.
Tax Residency Status
Tax residency in New Zealand is categorized into two main types: non-resident taxpayer and New Zealand tax resident. As a non-resident taxpayer, if you earn income from a New Zealand source, you generally owe taxes to New Zealand.
However, if your country or territory has a double tax agreement with New Zealand, it can influence how your income gets taxed.
On the other hand, as a New Zealand tax resident, you typically pay tax on your global income to New Zealand. This includes income like rent from an overseas property or dividends from foreign shares.
Even if you don’t bring this income into New Zealand, or if another jurisdiction has already deducted tax, it remains taxable. If you find yourself paying tax on the same income in two countries, you usually qualify for a foreign tax credit.
Moreover, if you’re a new tax resident or returning to New Zealand after a decade, you might be eligible for a 4-year temporary tax exemption on most foreign income types.
Leaving New Zealand and Tax Implications
If you’re a New Zealand tax resident and decide to leave New Zealand for good, you must determine if you’ve transitioned to a non-resident taxpayer status, as this changes your income tax obligations.
Additionally, leaving New Zealand will have specific effects if you have commitments like a student loan or are a KiwiSaver member. Each program has its own set of rules and timeframes, so it’s crucial to understand what applies to your situation.
International Measures Against Tax Evasion
New Zealand actively collaborates with other countries to exchange financial account information to counteract tax evasion. Before leaving New Zealand for good, inform your financial institution of your tax residency status. Not declaring income can lead to penalties.
Property and Assets Management
Managing your assets effectively is a top priority when leaving New Zealand for good. Your decisions can significantly impact your financial health and ease of transition to a new country.
Selling vs. renting out your property
When leaving New Zealand for good, you face a pivotal decision regarding your property: to sell or rent it out.
Current Property Market Conditions
The New Zealand Government’s swift response to the global COVID-19 outbreak has spotlighted the nation, making it a sought-after place to buy property.
In 2020, New Zealand has shifted towards a seller’s market. This means that now might be a favorable time if you’re considering selling your property before leaving New Zealand for good.
However, understanding the current market conditions is essential if you want to rent your property. Rental rates in New Zealand are calculated weekly, and depending on the property type and location, you might charge anywhere from NZ$400 to $2,500 per week.
Tax Implications
Whether you decide to sell or rent out your property, you must consider the tax implications.
For instance, selling might expose you to capital gains tax, while renting could alter your tax obligations based on your rental income.
Handling other assets like vehicles, stocks, and bonds
Leaving New Zealand for good requires making informed decisions about your other assets.
Vehicles
If you own a vehicle, you can sell, store, or ship it to your new country. Each option has its costs and benefits. Selling might offer immediate funds, while shipping allows you to use your vehicle in your new country.
Stocks and Bonds
Your investments in stocks and bonds need careful consideration. You can liquidate your investments or transfer them to an international account. Consult with a financial advisor to understand the tax implications and potential fees.
Transferring Assets Internationally
If you’re thinking of transferring assets like stocks, bonds, or even cash to another country, it’s crucial to research the best methods. Factors to consider include transfer fees, exchange rates, and the time it takes for the transfer to complete.
Pension and Retirement Funds
Ensuring the security of your retirement funds becomes paramount when leaving New Zealand for good. Your decisions about these funds can significantly impact your financial well-being in your new country. Here’s what you need to know:
Accessing your KiwiSaver funds when leaving
Leaving New Zealand for good prompts many to consider accessing their KiwiSaver funds. However, the process and implications vary based on your destination.
Moving to Australia permanently
If you’re relocating to Australia, you can transfer your KiwiSaver savings to an Australian superannuation scheme. But remember, transferring isn’t mandatory.
If you decide to go this route, contact your KiwiSaver provider, and they’ll guide you through the process.
Relocating to other countries
For those leaving New Zealand for good and moving to countries other than Australia, after living overseas for a year, you can access most of your KiwiSaver savings. This includes:
- Your contributions
- Your employer’s contributions
- The $1,000 kickstart (if applicable)
- Fee subsidies (if received)
- Interest earned on your savings
However, note that you cannot withdraw the government contributions. Additionally, you can transfer your KiwiSaver savings to an approved foreign superannuation scheme, but it must adhere to regulations under the KiwiSaver Act 2006 Section 228(e).
Transferring pension schemes to your new country
When you’re leaving New Zealand for good, another vital consideration is the transfer of your pension schemes. Recognized Overseas Pension Schemes (ROPS) offer a solution for those looking to move their pensions abroad.
Researching ROPS
Before making any decisions, thoroughly research ROPS that are compatible with both New Zealand regulations and the requirements of your new country. This ensures that you’re making a choice that benefits your financial future.
Potential penalties and charges
Transferring your pension can be complicated. Be cautious of potential penalties and charges during the transfer process.
It’s essential to be well-informed and possibly seek advice from financial experts familiar with both New Zealand and your destination country’s pension systems.
Insurance Considerations in Leaving New Zealand for Good
Leaving New Zealand for good requires meticulous planning, and insurance plays a pivotal role. Ensuring you have the right coverage can save you from unexpected financial burdens and provide peace of mind as you transition to your new home.
Evaluating your current insurance policies
Before leaving New Zealand for good, it’s crucial to review your existing insurance policies thoroughly. This ensures you’re not paying for unnecessary coverage and identifies any gaps that might expose you to risks in your new country.
Travel Insurance
Securing comprehensive travel insurance is one of the first steps when leaving New Zealand for good. This coverage can protect you from unforeseen events during your move, such as trip cancellations, lost baggage, or medical emergencies.
According to the New Zealand Government’s official website, it’s essential to have comprehensive travel insurance before heading away.
Without it, you’ll bear any overseas medical costs, including the potentially high cost of returning to New Zealand.
Health Insurance
Health care systems vary worldwide, and the cost of medical treatment can be significantly different in New Zealand.
Research health insurance options in your new country to ensure you receive the necessary care without incurring exorbitant expenses.
Life and disability insurance considerations
Life and disability insurance provides financial security for you and your loved ones in the event of unforeseen circumstances. When leaving New Zealand for good, adjusting these policies based on your new living environment is essential.
Adjusting Coverage
The cost of living can vary dramatically between countries. Ensure your life and disability insurance reflects these differences, so you have adequate coverage.
For instance, if you’re moving to a country with a higher cost of living, you should increase your coverage amount.
International Coverage Options
Not all insurance policies offer international coverage. Before leaving New Zealand for good, check with your insurance provider to see if your policy remains valid overseas. If not, explore international coverage options to ensure continuous protection.
Policy Terms and Conditions
Different countries have different regulations and standards for insurance. Familiarize yourself with the terms and conditions of policies in your new country. This knowledge will help you make informed decisions and avoid potential pitfalls.
Currency and Money Transfers
Managing your finances becomes a pivotal concern when leaving New Zealand for good. With the world becoming more interconnected, transferring money across borders has become routine for many.
However, the process can be daunting, especially when large sums are involved. Here’s a detailed guide to help you navigate this crucial aspect of your relocation.
Best practices for transferring large sums internationally
Leaving New Zealand for good often means transferring significant amounts of money to your new home country. Here’s how to do it efficiently:
Choose a Trusted Platform
Platforms like XE have made international money transfers more straightforward and secure. They offer competitive rates and provide live tracking and notifications, ensuring you stay updated throughout the process.
Before selecting a platform, compare fees, exchange rates, and user reviews to make an informed decision.
Establishing Finances in Your New Country
Leaving New Zealand for good and setting up in a new country brings fresh financial challenges. Ensuring a smooth transition requires understanding and navigating the financial systems of your new home.
Opening a bank account abroad
When you’re leaving New Zealand for good, opening a bank account is one of the first tasks you’ll face in your new country. This is crucial for receiving payments, handling daily expenses, and integrating into the local economy.
Requirements for Opening an Account
- Identification: Typically, two forms of government-issued identification are required.
- Proof of Address: This can be your current overseas address, but once you settle, you must provide a local address.
- Visa Details: Your visa type (work, residence, or student) can determine your eligibility for certain banking services.
- Tax Information: Some countries might require your New Zealand IRD number or a local tax identification number.
Choosing the Right Bank
Several international banks operate in multiple countries, which might make the transition easier. However, local banks might offer services more tailored to the needs of residents.
In New Zealand, major banks like ANZ, ASB Bank, BNZ Bank, Kiwibank, and Westpac have robust online banking systems and no-fee account options. Research the major banks in your new country to find the best fit.
Online Banking and Card Options
Understanding the local banking system can save you hassle and money. For instance, there’s a distinction between EFTPOS cards and regular debit cards in New Zealand.
While EFTPOS is common in New Zealand and Australia, it’s only sometimes accepted elsewhere. Ensure you’re familiar with the local card systems and online banking options.
Understanding the local tax system
Leaving New Zealand for good means adapting to a new tax system. While New Zealand’s tax system is relatively straightforward, your new country might have different rules and obligations.
Income Tax in Your New Country
The tax system in New Zealand is primarily based on personal income tax and Goods and Services Tax (GST). New Zealand doesn’t have inheritance taxes, local or state taxes, payroll taxes, general capital gains (with some exceptions), or healthcare taxes.
When you move, you’ll need to understand the primary sources of taxation in your new country and how they compare to what you’re used to.
Tax Numbers and Reporting
In New Zealand, the IRD number is essential for tax purposes. Similarly, your new country will have a tax identification system.
Ensure you apply for and receive this number as soon as possible. It’s crucial for employment, business operations, and sometimes even banking.
Seeking Local Tax Advice
Tax systems can be complex, and mistakes can be costly. After leaving New Zealand for good, consider consulting a local tax advisor or accountant in your new country.
They can guide your situation, ensuring you meet all obligations and take advantage of any benefits or deductions.
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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
