We have shifted our office to level 4 in the same building

Amendments to Foreign Super Bill announced

On 18 February 2014, the Minister of Revenue, the Hon Todd McClay, announced the release of Supplementary Order Paper (SOP) No 413 to the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill (112-2). The SOP proposes amendments to the Bill to provide extra flexibility for people wishing to transfer their foreign superannuation funds to New Zealand or Australia.

The Minister stated that the SOP introduces changes to the Bill to provide greater choice to individuals who decide to transfer their foreign superannuation before 1 April 2014. The Bill introduced a 15% option for those who withdrew a lump sum or made a transfer from their foreign superannuation scheme and did not comply with the rules at time. The proposed changes in the SOP extend the availability of the 15% option to those whose funds have not actually been transferred to New Zealand before 1 April 2014 but who can show they have lodged an application before that date.

The amendments to proposed s CZ 21B include withdrawals from foreign superannuation funds for which a person applies before 1 April 2014, in addition to withdrawals that are derived before that date.

This means that for transfer or withdrawals before 1 April 2014, a person can either calculate the actual amount of tax payable under the rules at the time or simply apply the 15% option. People who choose the 15% option can include 15% of their transferred or withdrawn foreign superannuation in their 2013/14 or 2014/15 income tax return and have their tax rate applied to that amount. The Minister said that if an individual's marginal tax rate is 33%, they would effectively pay just under 5% on the amount they transferred or withdrew.

Other proposed changes in SOP 413

The SOP introduced on 18 February 2014 also makes technical changes to the Bill. It inserts clauses amending the Child Support Amendment Act 2013 and Child Support Act 1991. The proposed amendments to the Child Support Act and the Child Support Amendment Act change the time at which provisions in the Child Support Amendment Act come into force. They also make consequential amendments to that Act and to the Child Support Act by changing references to dates. Some provisions originally intended to come into force on 1 April 2014 are to come into force on 1 April 2015 and some changes originally intended to come into force on 1 April 2015 are to come into force on 1 April 2016. The main amendments proposed to the Income Tax Act 2007 and the Tax Administration Act 1994 are as follows:

• Section DG 3(4)(c), which contains an exclusion from the rules on expenditure relating to certain assets, is repealed because it excludes a wider range of property than was intended.

• Sections EZ 23B and EZ 23BB have been amended to clarify the rules relating to depreciable property damaged by Christchurch earthquakes to allow for items of replacement property acquired at the same time.

• Amendments to ss 21C and 22 of the Tax Administration Act 1994 provide for the application periods of Orders in Council prescribing requirements for the preparation of financial statements.

Source: www.taxpolicy.ird.govt.nz and www.legislation.govt.nz