Question

Your client was born in Australia but lived in New Zealand for a long period of time. He came to New Zealand for a holiday after finishing university, met up with his former spouse and set up home here. He worked as a police officer in New Zealand. Since separating from his spouse, he moved back to Australia in July 2018 and works as a security contractor in Australia. He maintains a bank account in Australia in which his salary is deposited and receives interest income on a term deposit. He also holds shares in Australian companies and receives dividends. Although he lives in Australia most of the year, he comes to New Zealand frequently to visit his former spouse and his children and lives with them while in New Zealand. He maintains a bank account and owns an investment property in New Zealand.

Required:

Explain with reasons whether your client is a tax resident of New Zealand and whether his contractor income, interest and dividend income from Australia will be taxable in New Zealand. Support your answer with references to the Income Tax Act 2007 and appropriate case law.

Answer 1

You become a New Zealand tax resident when the first of these happens:

• you’ve been in New Zealand for more than 183 days in any 12-month period
• you have a permanent place of abode in New Zealand

But in the given case , he left Newzeland in June 2018 , So that means effective number of stay in newzeland is only 3 months or 91 days( 30 +31+30) .

You have a permanent place of abode if you have a place where you usually live in New Zealand.This is somewhere, such as a house, where you normally live in New Zealand even if you are not there all the time.You do not need to own the place. The place does not need to be vacant while you're away. For example, you might own a house and rent it out when you are not there.

We can conclude that our client has residential status is " Newzeland Resident " because he owes investment property & Bank account there.

being a New Zealand tax resident, you'll generally pay tax on your worldwide income. You'll need to pay tax on your overseas income even if:

• you do not bring it into New Zealand
• the other country or territory has deducted tax.

Conclusion - Any income earned by our client doesn't matter taxable in australia must be taxable in Newzeland Too.