Inland Revenue have begun their long-anticipated audits of individuals who transferred a pension to New Zealand between 2000 and 2014 (and who did not pay tax).
In a statement released in May 2014 Inland Revenue advised individuals who have transferred a pension since 2000 (and before the ‘new rules’ that came in on 1 April 2014) that they are interested in them.
WHAT DOES IT MEAN?
Under an amnesty program, taxpayers are able to tax only 15% of the pension that was transferred over, rather than work through the complicated rules to understand the true tax position. The amnesty program is available for taxpayers on their 2013-14 and 2014-15 tax returns.
Now that the deadline for filing the 2014-15 tax returns has passed (for those without a tax agent or extension of time to file), Inland Revenue have started audits.
If an audit has begun, you are no longer entitled to use the 15% option (although you may be able to negotiate such a position under the audit). Where an audit has begun, you are also not able to obtain a remission of penalties and interest under the voluntary disclosure rules.
WHAT TO DO
Simple really. If you think that you have a tax liability, don’t bury your head in the sand. Sort it out, before you get to the audit stage. Audits can be very time-consuming, and if tax is due, will result in penalty and interest charges.