Dunne: Tax bill brings super portability closer
A tax bill introduced to Parliament today by Revenue Minister Peter Dunne opens the way for New Zealanders returning home from Australia to bring their retirement savings with them.
The changes are part of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Bill.
Mr Dunne said portability of retirement savings between New Zealand and Australia has long been a problem for New Zealanders returning home.
Currently, New Zealanders working in Australia make compulsory contributions to an Australian complying fund. The funds are then locked into the scheme until the saver reaches retirement age, posing a problem for New Zealanders who want to return home permanently.
"Under the changes proposed in the bill, New Zealanders with retirement savings from certain Australian superannuation funds can transfer their funds into KiwiSaver when they return home permanently," Mr Dunne said.
"In the same way, KiwiSaver members who are moving to Australia will be able to transfer all of their savings in the scheme, including Crown contributions and any member tax credits to the Australian complying superannuation scheme," he said.
"The changes remove a significant obstacle faced by New Zealanders wanting to return home by allowing them to consolidate their financial affairs where they are choosing to live.
"Overall, it's a positive step towards improving labour mobility between our two countries," Mr Dunne said.
The changes are the result of an agreement with Australia signed in July and are expected to come into effect in the second half of 2010.
The bill also introduces several technical or remedial changes to improve the way the tax rules work and reduce compliance costs for taxpayers. They include:
Enhancements to KiwiSaver: the bill clarifies the enrolment rules for those under 18, and allows scheme providers to send a person annual reports via email hyperlink, if the person wishes to receive the information in this way.
Gift duty exemptions: transfers of assets and gifts made to local or central government will no longer be subject to gift duty, nor will gifts made to approved donee organisations (those listed on Inland Revenue's website www.ird.govt.nz or in schedule 32 of the Income Tax Act). This removes an obstacle to those who want to gift substantial items such as artworks or amenities for public benefit.
Binding rulings: several technical changes are being made to the legislation on binding rulings to make the law easier to apply. Binding rulings are issued by Inland Revenue. A ruling sets out how Inland Revenue will apply tax laws and gives greater certainty about the tax implications.
Mark Stewart - Press Secretary, Office of Hon Peter Dunne
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