Some 50,000 New Zealanders move to Australia each year with 14,000 going the other way. There is a goal of a single economic market. ASIC and NZ Financial Market Authority are strengthening the mutual recognition arrangements to provide services in each other’s countries based on the qualifications and experience they have obtained in their home country.
In 2009 the two governments signed an arrangement on Trans Tasman retirement savings portability. NZ has enacted legislation. Australia now has draft legislation for comment with an expected implementation date of about 1st July, 2013.
The amounts transferred from a Kiwi Saver scheme to an Australian APRA fund are treated as contributions made by the member for the member’s benefit. Not taxed on entry to Australia provided they are below the non concessional contribution cap. They become part of the tax free component.
Amounts sent to a Kiwi Saver fund in NZ are not taxed on exit. There are provisions for excluding Australian benefits sent to NZ and then subsequently returned to Australia. It is going to be important that the NZ Kiwi Saver fund holds information on the taxable/tax free components. These amounts have already been counted against the contribution caps in the year in which they were first made.
Australian sourced retirement savings in Kiwi Saver schemes: may not be withdrawn to purchase a first home; may not be transferred to a third country; and can be accessed on retirement after age 60.
NZ sourced retirement savings: must be held in an Australian APRA fund and not a SMSF; may not be transferred to a third country; and are only accessible at the NZ Superannuation and Retirement Income Act 2001 retirement age (currently 65).
The NetActuary Team