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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22888
Experience:  38 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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Chris - i have lived overseas since 2007 as a non-resident

Customer Question

Chris - i have lived overseas since 2007 as a non-resident and i had a call on tax income of USD167K for tax year 2006 - evidently i was 48 hours outside the tax window of 325 days consecutively for 1 tax year that year - and had to re-qualify the following year.....twice i offered a settlement to the tax department and it was rejected. i stupidly have let this slip and remain with this hanging over me as at today!!. i have had a number of lean years and simply cannot afford to repay it or maybe i could make 1 last offer - what do i do - i could offer a settlement payment sort do i simply declare bankruptcy. I want to retire in NZ but do not want this hanging over me.....
Submitted: 2 years ago.
Category: New Zealand Law
Customer: replied 2 years ago.
This should have been dealt with a lot sooner however i was trying to do the right thing and pay the debt or offer a settlement....i may very well be left with little or few options now regards ***** ***** position, and be forced into voluntary bankruptcy ...I understand about credit rating impact etc....The issue is that i eventually wish to return to NZ. Q1: Based on 22 years military service i am entitled to a government military pension at age 55....will this tax issue impact on that? Q2: Additionally - what are the rules regards ***** ***** the pension at age 65 if I do return to NZ - is there a pre-qualifying age (i.e. do i have to be in NZ as a tax resident prior to age 65 in order to qualify?)...........
Expert:  Chris The Lawyer replied 2 years ago.
Inland Revenue have very strict criteria about accepting settlements. Unfortunately they do not have much flexibility to accept commercial deals, largely because of policy considerations. Sometimes they do, but in your case I expect the penalty and interest have made this outstanding tax amount grow to a formidable sum. If you are not in New Zealand you can still apply for bankruptcy, which will enable the debt to be written off after 3 years. The issue is the value of your pension as an asset in your bankrupt estate.
Expert:  Chris The Lawyer replied 2 years ago.
When you apply for bankruptcy overseas, you must still disclose all of your assets, which would include any superannuation or pension entitlements. However the Official Assignee, who is in charge of bankruptcies, does not have jurisdiction over your assets overseas. So while you need to disclose this in your statement of affairs provided as part of the bankruptcy, it is quite unlikely that they will take steps to seize the pension rights.
Expert:  Chris The Lawyer replied 2 years ago.
As for the New Zealand pension, there is a residency requiremen. Iif you apply for New Zealand Superannuation the minimum time you must have spent resident and present in New Zealand to qualify is ten years, five of which when you are aged 50 years or over.There are several situations where absences from New Zealand can count towards your period of presence in New Zealand if you can show you were still ordinarily resident in New Zealand such as:medical treatment or vocational trainingserving on a ship registered or owned, and trading to or from, New Zealandoverseas military service of personnel of any commonwealth countryservice in connection with any war in which New Zealand forces were involved as a memberof any organisation attached to any armed forcesservice as an accredited Volunteer Services Abroad volunteer
Customer: replied 2 years ago.
1 - The value of the pension in NZ i assume would be impacted upon as a result of my bankruptcy at age 65 if i returned correct?
2 - Understood regards ***** ***** including super and pension / asset disclosure
3 - Thanks for the age limitations regards ***** ***** pension
Expert:  Chris The Lawyer replied 2 years ago.
If your pension was a New Zealand pension scheme, such as Kiwisaver that you are correct that the Official Assignee would be able to seize this when you reach age 65. But if your pension is an overseas asset, then they could not do this.
Customer: replied 2 years ago.
If bankruptcy is declared and then the 3 year period served does the Official Assignee still have rights to seize your pension assets in NZ at age 65?
Expert:  Chris The Lawyer replied 2 years ago.
They only have the right to seize the pension if it is domiciled in New Zealand. It may be worth checking the terms of your pension, because some pensions to state specifically that they are not available in a bankruptcy.
Customer: replied 2 years ago.
Thank you for your assistance - much appreciated.
Customer: replied 2 years ago.
sorry one further question....the declaration of bankruptcy is an on-line process for offshore person(s) correct ?
Expert:  Chris The Lawyer replied 2 years ago.
Yes, it can be done online
Expert:  Chris The Lawyer replied 2 years ago.

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