The FamilyBoost scheme has run into a snag. Some people receive income in the form of schedular payments. The gross income is being used by Inland Revenue for assessing entitlement to FamilyBoost and the department realises this is wrong because no expenses are deducted from the income. For the six months from 1 October 2024 to 31 March 2025, the Commissioner proposes to treat income subject to schedular payments as exempt income for the purposes of FamilyBoost (see draft consultation document). The law is to be amended to cater for schedular payments.
Overseas pensions
There are tax complications when a taxpayer wants to transfer a pension scheme from overseas to a New Zealand scheme. Before embarking on a transfer of this nature, get advice. If the scheme is being transferred from the UK to New Zealand, two taxes can be levied. The latest Tax Bill proposes to allow the taxpayer to use the New Zealand scheme to pay the tax. This would apply only to transfers of funds and not to any tax on withdrawal of funds. Previously, the taxpayer has had to find the money, personally, to pay the NZ taxes and if they used the money from the fund that would trigger a UK withdrawal penalty if they weren’t retirement age. If the scheme pays the NZ tax then that isn’t seen as a withdrawal by the individual in the UK, which fixes the problem. The Bill also proposes to allow people under the age of 16 to be enrolled in KiwiSaver if one of their guardians contracts directly with the provider in the name of the young person. This is expected to come into effect from 1 July 2025.
