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Where Taxpayers and Advisers Meet

UK/ NZ DTA question

mcgrath23
Posts:1
Joined:Wed Apr 05, 2017 12:41 am
UK/ NZ DTA question

Postby mcgrath23 » Wed Apr 05, 2017 12:45 am

Hi,

I am planning on moving to New Zealand from the UK to be closer to my partner. Until I can find work in NZ I intend to travel between the U.K. and NZ as my job rota is work for 21 days then 28 days leave. I would be in the U.K. approximately 175 days per annum & in New Zealand for 161 days (the remaining days would be travelling) I am aware there is a Double Tax Agreement between the two countries but I'm unsure how it all works with regards to non-resident status etc. Any help would be greatly appreciated.

Many thanks

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: UK/ NZ DTA question

Postby AGoodman » Wed Apr 05, 2017 4:03 pm

I don't know the answer (more info required) but I would approach it like this:

1. Will you be tax resident in the UK - almost definitely under the statutory residence test;
2. Will you be tax resident in NZ under NZ law - you will need to look into this;
3. If not NZ resident, double tax unlikely to be an issue
4. If NZ resident, check whether NZ law would tax you on UK employment income received for work carried out in the UK;
5. If taxed in NZ (as well as the UK, consider the tie break clauses of the UK / NZ treaty - Article 4 - you should hopefully be able to reach a conclusion on your "treaty residence" - it can only be one country. I suspect UK.
6. Look to the relevant parts of the treaty that govern the type of income - for employment income it is Art 16.

If you are treaty resident (or only resident) in the UK then it looks like you would only be taxed in the UK. If NZ treaty resident, you would likely pay the UK first and receive a credit for UK tax paid against NZ tax.


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