Site Designed By Airnet
Taking KiwiSaver to the UK
 
Q.        I am British, and a New Zealand permanent resident. I have been working and contributing to KiwiSaver since the start in 2007 and have built up over $40,000 in my fund. I am planning to return to the UK - possibly permanently - when I turn 60 next year. What should I do with my KiwiSaver when I leave? Should I leave it and continue contributing from abroad, to get the $521 in tax credits until I turn 65, or cash it up?
 
A.         I am sure you are pleased with your KiwiSaver balance. However, if you do leave New Zealand permanently next year and apply to withdraw the funds, you will lose all the Member Tax Credits that you have received to date (up to $5214 over the past 6 years). This will make quite a dent in your balance. 
 
You will also need to supply various documentary evidence for this early withdrawal, and there is a 12 month stand-down. The fund manager will need evidence of your departure (such as your plane ticket or stamp in your passport), evidence of your address on arrival, evidence of your address 12 months after arrival and a notarised declaration of your immigration status. 
 
If you decide to leave your KiwiSaver in New Zealand, do not be tempted to continue making payments while you are abroad, in the hope of getting up to $521 in Member Tax Credits each year. KiwiSaver has been set up to thwart people who try to do this. If you notify your fund manager of a new address overseas, they will not apply to Inland Revenue for MTC on your behalf for the period after your departure. If you keep a New Zealand address, you may receive MTC but it will be clawed back when you apply to withdraw your savings at age 65. The withdrawal form requires that you declare (under oath) any periods that you were not resident in New Zealand. Any Member Tax Credits paid during those periods will be deducted from your final payment. 
 
If you are not sure that you will be leaving for good, and given the amount of MTC you will lose by making an early withdrawal, you may prefer to wait until you turn 65. At that stage you should be able to make a full withdrawal as you will have reached the age of eligibility. You will need to have an active New Zealand bank account for the funds to be transferred into.  I suggest you get your hands on your fund manager’s Withdrawal Application form, as these forms are full of useful information to help you with your planning.