Is this a great way to save Tax on Overseas Pensions?

18 July 2017

Is this a great way to save tax on overseas pensions?

If you are currently receiving a monthly pension from overseas, the pension is fully taxable in New Zealand (presuming you are a NZ tax resident).

Say it is $10,000 that you receive each month.

Some tax payers have changed their monthly payments to an annual payment.  So, using the above example, that would mean a total of $120,000 received for the year.  The tax payers are trying to say it's a lump sum and thus taxable under the Schedule/Formula method, which would result in less tax being payable.

Unfortunately, NO.  This is still a pension and not a lump sum.  So it is fully taxable!

Kind regards

Ross Barnett