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Where Taxpayers and Advisers Meet

NZ Resident & UK PET’s

jacbjacb
Posts:3
Joined:Tue Apr 24, 2018 9:07 pm
NZ Resident & UK PET’s

Postby jacbjacb » Thu Aug 16, 2018 7:23 pm

I am a British Citizen who emigrated from the UK in 2006. I initially became resident (+tax resident) in Vietnam before gaining residency (+tax residency] in New Zealand in early 2011.

Sadly my Mother passed away late in 2017 and there are UK failed Pet’s to consider. Since I am a New Zealand Tax resident where no inheritance tax is paid and there is a United Kingdom/New Zealand have a Double Taxation Convention (SI 1984 Number 365 and Protocols) etc, should l personally be liable for the tax or should it be paid tax be paid by Mothers estate?

If I do end up paying the paying the tax, can I then reclaim it in New Zealand using the HMRC’s form “APPLICATION for relief at source from United Kingdom income tax and CLAIM to repayment of United Kingdom income tax” NZ02 ?

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: NZ Resident & UK PET’s

Postby maths » Thu Aug 16, 2018 7:43 pm

There is no double tax treaty between NZ and the UK concerning death taxes.

Assuming mother was UK domiciled (or deemed domiciled) for UK IHTV purposes then if you received lifetime gifts from her and she died within 7 years thereof then you, as donee, are liable to any IHT arising.

However, it may be that her nil rate band covers such gifts in which case there will in practice be no UK IHT to pay.

jacbjacb
Posts:3
Joined:Tue Apr 24, 2018 9:07 pm

Re: NZ Resident & UK PET’s

Postby jacbjacb » Thu Aug 16, 2018 11:07 pm

Thank you Maths

I found this list on the internet …. Is it current?

Double taxation treaties applying to IHT:

• Republic of Ireland 1978
• South Africa 1979
• USA 1979
• Netherlands 1980 (amended in 1996)
• Sweden 1981 (amended in 1989)
• Switzerland 1995
• France 1963
• Italy 1968
• India 1956
• Pakistan 1957

I am getting different answers from different sources ….. They have confused me with terms such as:

Situs rules
Tax credit
Section 159
Section 158
Unilateral Relief

Do these terms relate to my situation?

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

Re: NZ Resident & UK PET’s

Postby AGoodman » Tue Aug 21, 2018 10:41 am

Yes, that is current. There is no IHT (capital taxes) treaty with NZ. The UK has very few. It is irrelevant anyway because treaties are there to avoid double taxation and you are not suffering double taxation. No NZ tax is payable.

If mother's failed PETs are under £325,000 (or possibly £650,000 if she was a widow), the estate will absorb any additional tax. If more than that, you could be liable to UK IHT on the excess over the nil rate band(s).

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: NZ Resident & UK PET’s

Postby maths » Tue Aug 21, 2018 2:07 pm

I wouldn't get bogged down in s158 etc. The position is clear as the posts above indicate.

Just for info" ss 158 and 159 are the sections of IHTA 1984 which provide for tax credits where necessary (i.e. possible double tax) with s158 relating to any treaty (none with NZ) and s159 so-called unilateral relief (where no treaty).


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