Transfer Your KiwiSaver to Australia: Tax Considerations Explained" - Learn how to handle your KiwiSaver savings when becoming an Australian tax resident. Understand PIR rates and taxation of earnings in this guide.
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“Hey peeps, will move to Australia for work soon and will become a tax resident there. The only investment that I have in NZ is KiwiSaver connected to my bank. How will tax be applied for this?
Would love to hear from anyone who’s been through this.”
(Original question on Reddit)
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If you become a tax resident of Australia, you can transfer your KiwiSaver savings to an Australian superannuation scheme. However, suppose you decide to keep your New Zealand KiwiSaver and become an Australian tax resident. In that case, you will likely not incur any additional tax costs on top of your current KiwiSaver tax. Here’s a brief reminder of how the KiwiSaver tax works:
Prescribed Investor Rate (PIR):
Generally, when you invest in KiwiSaver, you’re required to select a Prescribed Investor Rate (PIR). This rate is used to calculate the tax on your KiwiSaver earnings. When you move to Australia, you can typically keep your existing PIR, and nothing changes in this regard.
Taxation of Earnings:
If you leave your KiwiSaver account in New Zealand, it will be taxed at a rate of 28% on the investment earnings in your KiwiSaver each year. This tax rate is known as the Portfolio Investment Entity (PIE) tax rate. Your investment earnings may include dividends, interest, and capital gains generated by your KiwiSaver investments.
It’s important to seek the advice of a tax advisor or financial expert in both New Zealand and Australia for personalized advice to ensure that you meet your tax obligations in both countries. Tax laws and regulations can be complicated, and it is necessary to make informed decisions about your KiwiSaver when relocating to another country.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
