1 00:00:00,000 --> 00:00:02,280 Speaker 1: A couple of tax changes to tell you about new 2 00:00:02,279 --> 00:00:05,440 Speaker 1: bill to stop migrants being taxed on estimated overseas income 3 00:00:05,519 --> 00:00:08,200 Speaker 1: and instead only on what they actually earn. Also, people 4 00:00:08,240 --> 00:00:10,240 Speaker 1: and I hadn't thought about this. People using solar and 5 00:00:10,240 --> 00:00:13,360 Speaker 1: feeding it back to the grid won't be charged income tax. 6 00:00:13,400 --> 00:00:14,800 Speaker 1: Did you think about that when you stuck a few 7 00:00:14,800 --> 00:00:17,279 Speaker 1: panels on your roof? Anyway, Jeff Nightingale's an independent tax 8 00:00:17,400 --> 00:00:18,920 Speaker 1: expert in this back. Well, it's Jeff Morning. 9 00:00:19,440 --> 00:00:20,120 Speaker 2: Good morning, Mike. 10 00:00:20,280 --> 00:00:23,400 Speaker 1: This migrant business estimated v received. Is this complex? 11 00:00:24,800 --> 00:00:27,680 Speaker 2: Yeah, well it is a little complex, but it's a 12 00:00:27,680 --> 00:00:32,879 Speaker 2: good measure. At the moment. New Zealanders pay a deemed 13 00:00:33,120 --> 00:00:38,320 Speaker 2: tax on foreign shares and that's a deemed income of 14 00:00:38,360 --> 00:00:40,919 Speaker 2: five percent, and the net gets taxed at the marginal rate. 15 00:00:41,040 --> 00:00:43,519 Speaker 2: So that's a cash cost for owning shares, whether or 16 00:00:43,560 --> 00:00:45,000 Speaker 2: not you get a dividend or whether or not you 17 00:00:45,080 --> 00:00:48,680 Speaker 2: sell them. And that's been a real problem for high 18 00:00:48,760 --> 00:00:51,519 Speaker 2: value migrants, and particularly now I've got the active investor 19 00:00:51,560 --> 00:00:53,760 Speaker 2: plus scheme. We want these people to come here and 20 00:00:53,800 --> 00:00:56,560 Speaker 2: invest five to ten million, and they usually have a 21 00:00:56,600 --> 00:00:59,080 Speaker 2: portfolio of shares. Of other things I've done around the 22 00:00:59,080 --> 00:01:01,200 Speaker 2: world and we're needed, we start taxing them on an 23 00:01:01,200 --> 00:01:04,360 Speaker 2: annual basis whether or not they sell. So it's designed 24 00:01:04,440 --> 00:01:06,920 Speaker 2: to address that and make it more attractive to come 25 00:01:06,959 --> 00:01:08,520 Speaker 2: to New Zealand and it's a good measure. 26 00:01:08,680 --> 00:01:11,080 Speaker 1: Does that put us on a level playing field for 27 00:01:11,360 --> 00:01:14,000 Speaker 1: migrants with other countries and the tax treatment. 28 00:01:14,319 --> 00:01:17,200 Speaker 2: Yes, because generally they are subject to terrible words, but 29 00:01:17,400 --> 00:01:20,920 Speaker 2: generally they subject to capital gains tax on those offshore 30 00:01:20,959 --> 00:01:24,120 Speaker 2: share portfolios in their home country, but only when they 31 00:01:24,160 --> 00:01:26,920 Speaker 2: sell them. And you know, some of this venture capital 32 00:01:26,959 --> 00:01:31,040 Speaker 2: investment may never be worth anything. And so what we're 33 00:01:31,040 --> 00:01:34,240 Speaker 2: doing is giving them the option to elect into essentially 34 00:01:34,280 --> 00:01:36,319 Speaker 2: a sort of a capital gains tax regime in New 35 00:01:36,400 --> 00:01:39,200 Speaker 2: Zealand and say, if you sell those shares, will tax 36 00:01:39,319 --> 00:01:43,040 Speaker 2: seventy percent of the profit, pay tax in New Zealand, 37 00:01:43,080 --> 00:01:45,160 Speaker 2: get a credit in your home country so it aligns 38 00:01:45,160 --> 00:01:47,600 Speaker 2: with their offshore jurisdiction better. 39 00:01:47,760 --> 00:01:50,160 Speaker 1: What would your assessment of that being a handbreak if 40 00:01:50,160 --> 00:01:53,160 Speaker 1: we hadn't changed it. Is it a major? Yeah? 41 00:01:53,160 --> 00:01:56,240 Speaker 2: It was a major because I particularly with this Golden 42 00:01:56,320 --> 00:01:59,640 Speaker 2: visa active investor thing, because that's the people we're trying 43 00:01:59,640 --> 00:02:01,960 Speaker 2: to attray five to ten million dollars to invest in 44 00:02:02,000 --> 00:02:03,880 Speaker 2: New Zealand. So I think it's a it's a good 45 00:02:03,960 --> 00:02:06,200 Speaker 2: move to fix it there. The only disappointing thing is 46 00:02:06,200 --> 00:02:08,400 Speaker 2: it would have been good to give that elective option 47 00:02:08,520 --> 00:02:09,320 Speaker 2: to all New Zealand. 48 00:02:09,360 --> 00:02:11,239 Speaker 1: Is not just well, I was going to say, so, 49 00:02:11,560 --> 00:02:13,320 Speaker 1: what's a migrant? What's not a migrant? And a you're 50 00:02:13,320 --> 00:02:14,840 Speaker 1: giving different treatment to different people. 51 00:02:15,560 --> 00:02:18,200 Speaker 2: Yeah, you are. So a migrant is someone that's not 52 00:02:18,360 --> 00:02:20,400 Speaker 2: been resident of New Zealand for five years, So it 53 00:02:20,400 --> 00:02:23,680 Speaker 2: does apply to returning New Zealanders. You have to have 54 00:02:23,760 --> 00:02:26,560 Speaker 2: been non resident for five years. And there was a 55 00:02:26,600 --> 00:02:28,560 Speaker 2: lot of lobbying to try and get the Because it's 56 00:02:28,600 --> 00:02:31,040 Speaker 2: an electival, you're elect into it, so there's a lot 57 00:02:31,040 --> 00:02:34,000 Speaker 2: of lobbying to try and get it extended more broadly. 58 00:02:34,040 --> 00:02:36,000 Speaker 2: But but at the moment, the government's just focused on 59 00:02:36,040 --> 00:02:36,800 Speaker 2: this one problem. 60 00:02:36,919 --> 00:02:39,200 Speaker 1: Okay, the good thing, As I said, I hadn't thought 61 00:02:39,200 --> 00:02:40,760 Speaker 1: about it. I mean, you're six and panels on the roof. 62 00:02:40,800 --> 00:02:42,240 Speaker 1: You think you're doing the right thing saving on a 63 00:02:42,280 --> 00:02:44,240 Speaker 1: power bill. But I mean the concept of paying tax, 64 00:02:44,240 --> 00:02:45,760 Speaker 1: I mean that would be that would come as a 65 00:02:45,760 --> 00:02:47,120 Speaker 1: surprise for many people, wouldn't it. 66 00:02:47,680 --> 00:02:50,160 Speaker 2: It would Yeah, you sell the electricity from your your 67 00:02:50,200 --> 00:02:53,120 Speaker 2: your run off solar and its income, and so then 68 00:02:53,160 --> 00:02:55,400 Speaker 2: you've got to declare that and come you've got to 69 00:02:55,400 --> 00:02:57,480 Speaker 2: claim costs for putting the panels on the roof. And 70 00:02:57,520 --> 00:02:59,440 Speaker 2: it's just a nightmare. And so this is a really 71 00:02:59,560 --> 00:03:03,320 Speaker 2: sense of pragmatic thing. The government's saying, a little bit 72 00:03:03,320 --> 00:03:05,480 Speaker 2: of income from solar panels on your roof, we're just 73 00:03:05,520 --> 00:03:07,480 Speaker 2: going to call it exempt. Not trouble you with a 74 00:03:07,560 --> 00:03:09,840 Speaker 2: tax system. It's a really sensible thing to do. 75 00:03:09,880 --> 00:03:12,959 Speaker 1: From tax point of view. Is the government doing pretty 76 00:03:13,040 --> 00:03:15,440 Speaker 1: much all they can about getting people into the country 77 00:03:15,440 --> 00:03:16,240 Speaker 1: and making it easy. 78 00:03:16,280 --> 00:03:18,840 Speaker 2: Now, yeah, they are, because the other thing in this 79 00:03:18,840 --> 00:03:20,840 Speaker 2: bill is a big bill. It's one hundred page tax bill. 80 00:03:20,880 --> 00:03:23,360 Speaker 2: But the other thing and there is a provision to 81 00:03:23,560 --> 00:03:26,800 Speaker 2: allow digital nomads, so people to come to New Zealand 82 00:03:27,400 --> 00:03:30,480 Speaker 2: and work here. So we already change the visas so 83 00:03:30,560 --> 00:03:33,240 Speaker 2: that you can do some digital work on a visitor's 84 00:03:33,320 --> 00:03:36,520 Speaker 2: visa and work back into your offshore employer. And now 85 00:03:36,520 --> 00:03:38,240 Speaker 2: we've changed the tax rules to say that you can 86 00:03:38,280 --> 00:03:40,720 Speaker 2: do that for two hundred and seventy five days in 87 00:03:40,760 --> 00:03:44,040 Speaker 2: an eighteen month period without being subject to New Zealand tax. 88 00:03:44,080 --> 00:03:46,160 Speaker 2: But it's got to be an offshore employer and you've 89 00:03:46,200 --> 00:03:48,280 Speaker 2: got to be paying tax on that income in the 90 00:03:48,280 --> 00:03:52,000 Speaker 2: offshore country. But that's another sensible move to get more 91 00:03:52,000 --> 00:03:52,960 Speaker 2: people into New Zealand. 92 00:03:53,000 --> 00:03:55,720 Speaker 1: Good inside has alway, Jeff ppreciate your expertise. Jeff Nightingale, 93 00:03:55,720 --> 00:03:57,720 Speaker 1: independent tax expert, with us this morning. 94 00:03:58,040 --> 00:04:00,960 Speaker 2: For more from The Mic Asking Breakfast, listen live to 95 00:04:01,080 --> 00:04:04,120 Speaker 2: News Talks at B from six am weekdays, or follow 96 00:04:04,160 --> 00:04:05,720 Speaker 2: the podcast on iHeartRadio.