WHAT'S CAUSING STRESS WITH YOUR FINANCIAL MOVE FROM THE UK TO NZ?
For more information about our process please contact us on firstname.lastname@example.org – if you are not an existing client then by all means still contact us and we will quote our fee for our Retirement Planning report! BritsNZ Ltd services cover an extensive range as follows:
UK Pension transfer advice
NZ Pension options – Kiwisaver
UK and NZ State pensions
Banking in the UK and NZ
Our Disclosure Document can be requested by clicking HERE.
UK Tax issues
New Zealand Wills and Family Trust advice
superannuation (NZ) not pension (UK)
In New Zealand, what the British know as Pension Schemes are called Superannuation Schemes! There are a number of employers in NZ, usually larger employers, who will offer some form of company superannuation scheme just like an employer scheme within the UK that you may have been part of. They are required, by law, to offer all employees access to a KiwiSaver Plan and if you, the employee, joining such a KiwiSaver scheme they must pay a minimum of 3% of your salary into the plan - as must you!
Many UK Company and Personal Pensions can be transferred into NZ into what are known as QROPS schemes. The UK HMRC set the rules under which such transfers are to be made and what tax issues there may be for you to understand (with our expertise) and transferring must be a viable option to consider. In addition, after you have been in NZ for 4 years the NZ IRD will look to tax your pension benefits held off-shore. So, whilst you have a 4 year window to consider transferring you need to be aware that transfers can take anywhere from 3 to 9 months to complete so do not leave it too late. In simple terms, when you see NZ as your long term home (i.e. to at least age 55) then that is the time to look at transferring benefits!
Motivating our clients to undertake any Retirement Planning processes is one of our greatest challenges – simply remember that, whether you like it or not, THE CLOCK IS TICKING toward retirement and putting in place some financial plans to allow you to retire when you want with the finances you want/need means planning. The SOONER THE BETTER!
You may have transferred your UK pension benefits and be accumulating either/both KiwiSaver or company superannuation benefits but, are they going to get you to where you want to be at the age you wish to retire? If you are an existing client of BritsNZ Ltd, on the financial side of things, we offer a FREE of charge retirement planning review service where we look at what age you want to retire, look at what you want to do in retirement, look at your cash needs and your income needs and then look at how close you are (currently) to achieving your goals. Our calculations are based on conservative estimates of growth and take account of any transferred benefits, KiwiSaver benefits and NZ State pension benefits. The aim is to see if you will hit the fund target you need to meet your retirement plans and allow you to make some decisions on planning strategy from a position of knowledge.
A KiwiSaver pension scheme is a form of personal pension plan which employers must offer to all new employees, albeit there is no compulsion to join. If you join (and you should do so as you will be getting 'free' money from both your employer and the Government) then you can pay in at the following rates:
3% (minimum); 4% ; 8%
Your employer must pay a minimum rate of 3%
Member Tax Credits are paid into your KiwiSaver by the Government, at the rate of 50c for every dollar you contribute up to a maximum of $521.43 per year
We know that the first year in NZ can be expensive but would recommend that you start saving into Kiwisaver immediately. As soon as you start working you can take advantage of your Employer and Government contributions. Once you are settled in NZ you can then assess whether you wish to increase your contribution level.
NOTE: KiwiSaver can be accessed at various times other than retirement but do bear in mind the (almost) sole focus of this type of retirement savings plan is FOR retirement and hence you should be aiming to save until you can access the funds, which is NZ State Retirement Age – this is currently age 65 for both men and women.
There are three ways in which you can select a KiwiSaver plan:
Allow the NZ IRD to decide by having them place you randomly into one of the default schemes.
You employer will point you to a preferred provider.
You choose your own KiwiSaver provider.
You ALWAYS have a right to choose your own provider and BritsNZ Ltd recommends that you use the Booster KiwiSaver Scheme. We use this scheme ourselves; it is a Kiwi company; it has KiwiSaver friendly fees; it has a range of investment risk funds into which you can invest (either across a range or into just one fund). There is no guarantee that the Booster fund will outperform any/all other KiwiSaver schemes but they have a complete focus on the KiwiSaver market and this is their core business and you can see more details about this KiwiSaver plan by clicking HERE.
UK & NZ state pensions
As a New Zealand Resident you will be entitled to take a FULL NZ State Superannuation income from age 65. All previous years of working in the UK are counted toward maximising your NZ State entitlement and effectively the two Governments liaise to sort out what money goes where but from your perspective you simply get your superannuation income paid via the PAYE system on a fortnightly basis.
If you are coming from a country other than the UK then this general rule may apply to you (but each country is different so care is needed and advice should be sought………You may become entitled to a full NZ State superannuation income at age 65 by working in NZ for 10 years with at least 5 of those being after age 55.
If you have ISAs, PEPs, or TESSAs you can no longer fund these once you leave the UK. You can leave them invested in the UK for up to 4 years and suffer no tax consequences in NZ. After that time you may become liable to NZ tax on any gains in value whether realised or not. This position also applies to share holdings.
If you have endowments - you need to consider the time left to run, the life cover amount, what it is being used for, how much it is costing you and where it is invested. You CANNOT use a UK endowment to underpin a mortgage here in NZ!
If you have any investment bonds etc or any other investments then we need to consider any potential tax implications, whether you need to maintain funding and whether it would actually be better to have the funds here in NZ. To seek further advice please contact us here.
BANKING & CURRENCY
We recommend that you open an NZ bank account before leaving the UK. We have close connections with BNZ in NZ and recommend you open your accounts with them. If you open an account with BNZ and have any issues, questions or causes for concern then please let us know and we can talk directly to the Head of Migrant banking thereby opening doors that you would struggle with!
You can either contact BNZ directly with an application for opening an account as an international migrant….or….do so through ourselves so that we can initiate an early contact with the Migrant Banking team so they can alert to your application and can thereby react more swiftly. Once your account is opened please let us know so we can keep BNZ in the loop and ensure that they send you details of who to see and where to go once you arrive in so you can complete the account opening processes.
Click the form 'Apply before you fly' to download the BNZ factsheet for what they can offer immigrants and how to apply.
WHY ALL THE PAPERWORK?
The reason is that whilst in the UK you have to hand all the paperwork you will need to complete the application form and more importantly to enable you to meet the money laundering requirements. Again, by doing this you will simplify your early days in NZ as all you will be required to do is show your passport as ID and the account will be activated. If you let us know when you are due into NZ and where you will be going we will liaise with BNZ to highlight the branch and person you should see to open that account – again personal service at an important time! It also means that any funds traded by your currency specialist will be in your NZ account awaiting your arrival, currently earning potentially double interest rates than what it is earning in the UK.
As part of emigrating to New Zealand you will need to change your Sterling into NZ$ amounts. Most people will initially think that this should be done via their UK bank but this is a potentially very costly option. In simple terms banks are banks and you are, sorry to say, a minnow to them. They have little to no incentive to go out there and find you the best exchange rate, regardless of exchanging £5,000 or £500,000.
The MOST important thing to you as a migrant will be to maximise your exchange rate so you can have as many NZ$s as possible when you start your new life. To do that our recommendation is to use a currency exchange specialist. In our experience, the extra that you can make by using a specialist will be significant and in some case we have experienced has made the difference between being mortgage free in NZ and not…or…in another case allowed the migrant to buy a car with the “extra” they made using a specialist.
You will find the specialists we recommend in our helpful sites page. Changing currency can be a little complex so talking to the specialists (and we always recommend talking to two so you can get them to compete) as early as possible will allow you to grow your knowledge and thereby potentially make better decisions. We can also help by providing you with a free copy of our brief outline of the differing ways in which you can trade currency. Simply e-mail us on and ask for your copy!
You do not remove yourself from liability to UK IHT simply by leaving the UK, even if it is on a permanent basis. You have to “shed” your UK domicile – this is both a time thing and a question of what you hold in the UK and when. We are in a position to explain this, so please contact us here.
UK tax issues
There will be a number of things you need to do before you leave the UK in order to keep the tax man happy. Exactly what will depend on your personal circumstances, but we are talking about tax returns, get interest [what interest I hear you say – LOL!] paid tax free, closing down any child benefits etc. Closing down the UK is very important and whilst it can be done from NZ you will appreciate it makes far more sense to do it whilst in the UK! For a review of your situation and advice on what you will need to complete, contact us here.
Our general rule of thumb is that you should maintain whatever existing life cover you have in the UK [so make sure you leave sufficient funds in your UK bank account] until you are certain that NZ is to be your long term home. This generally means we will not look at replacing and reviewing your existing cover until you have been here for a minimum of 9 to 12 months.
You should inform your UK provider of your move to NZ – most will be fine with maintaining the life cover – be aware that this may not be the same for Critical Illness Plans – for some reason they tend NOT to allow these to continue and if you need to maintain that cover we can put some in place once you arrive in NZ.
It is important that we review what cover you have and identify whether we believe there is enough in place now – we appreciate cost may be an issue but knowing what is ideal is important. When we need to review your cover we will ensure that you speak with specialist in the NZ protection field.
A point of difference between the UK and NZ relates to sick pay. For most people starting new in NZ that will be almost non-existent, no more than 5 or 6 paid days p.a. initially. This is a culture shock and you will need to give some serious thought to protecting your income in the event of ill health, especially once you buy a property.
This can be very expensive for an "all dancing/all singing" policy. If you stick to something that covers specialist costs and tests and hospitalisation and operations etc the costs become more reasonable but still expensive. You need to consider the risks of needing this cover and what the local State system can offer you. For specialist advice and a review of your current circumstances and to ensure that your family are suitably protected in your new country contact us here.
WILLS & TRUSTS
You should ensure, particularly if you have children, that you have an up-to-date will in place in the UK. You should consider creating an NZ will once the main bulk of your cash/assets are here in NZ, you feel settled and you can decide whether you want your children brought up in NZ or the UK – if NZ then it may take some time to find people you would want to ask to be Guardians.
In NZ you can create a family trust. The purpose of such a trust is to provide protection to the family over the longer term, it is NOT. As is too often stated in the UK, a way to shield funds from tax but rather a way to shield your assets from predators. Bear in mind too that you will be:
Giving up your ownership of your assets/funds
You may need a 3rd party’s agreement for the purchase of anything through the Trust (no more spontaneity!)
The Trust will be a legal entity which means there will be on-going costs such as for accountants and proper maintenance of the Trust.
There are some financial benefits, in the form of how much you can get into the Trust, of opening such a Trust prior to leaving the UK. Family Trusts are not for everyone, either because they do not have the asset base to warrant it or because they do not have children etc., and they are a very specialised area. BritsNZ Ltd can give you access to a specialist company dealing with Family Trusts and if you think it might be something you want to look into you should do so sooner rather than later to give yourself time to understand how it works and make an informed decision.