• de minimis rule,
• new resident's accrued superannuation entitlement exemption (section EX42 of the Income Tax Act 2007), or
• non-resident's pension or annuity exemption (section EX43).

In addition, if you are a transitional resident an exemption can apply for the first 48 months of residency so that certain foreign sourced income does not need to be returned.

However, on 6 April 2006, the United Kingdom introduced the Qualifying Recognised Overseas Pension Scheme (QROPS). This scheme allows the transfer of UK pension funds to overseas providers that meet certain requirements.

It's Inland Revenue's view that from 6 April 2006, the exemption from the FIF rules can't apply to resident investors who have a beneficial interest in a UK pension scheme which will allow the transfer into a QROPS unless the de minimis applies or they are transitional residents.

However, this won't apply if the individual scheme rules don't allow a transfer; impose significant "penalties" for transferring interests out of the UK scheme; or if there is a substantial decrease in the present value of any benefits on transfer to a QROPS.

De Minimis Rule

The de minimis rule exempts rights with a cost of less the NZ$50,000.  The cost includes all contributions made by or on behalf of the person or the person’s employer. Where a transfer from another superannuation scheme was made (ie changing funds) it is the original contributions by or on behalf of the person or the person’s employer that are taken into account.
 
New Resident's Accrued Superannuation Entitlement

The new resident's accrued superannuation entitlement exemption applies to individuals with funds under which the rights accrue either before becoming a New Zealand resident or within 4 years of doing so.  The value of the rights is calculated by deducting the market value of the rights at the end of the period from the market value of the rights at the beginning of the period.

Such rights must have been acquired either through the person’s employment or the person must be wholly or mainly self employed when either acquired or at the time the exemption is being applied.

The contributions to the fund by or for the person must be calculated by either some fixed relationship to the person’s income from employment or self-employment, or to provide a benefit that bears a fixed relationship to the person’s inflation adjusted income from employment or self-employment.

The contributions must only be made by the person, the person’s employer or associate of the employer, or by transfers from another similar qualifying superannuation scheme (ie changing funds).

Finally, the future benefits of the fund must not be able to be assigned or cashed in, except where the person becomes physically incapacitated, transfers to another similar or reaches normal retiring age, assigns the benefits to a spouse under a relationship property agreement, or at a cost a substantial decrease in the present value of the benefits.   Where rights are acquired under a relationship property agreement the exemption can still apply to the recipient.

Non-resident's Pension Or Annuity Exemption

The non-resident's pension or annuity exemption applies to a person’s rights to benefit from a pension or annuity provided by a FIF.

The person must have funded the acquiring of the rights before becoming a New Zealand resident, within 3 years of doing so, or in anticipation of ceasing to be a New Zealand resident.

The future benefits of the fund must not be able to be assigned or cashed in, except where the person assigns the benefits to a spouse under a relationship property agreement or at a cost a substantial decrease in the present value of the benefits.

This exemption does not apply where the rights were acquired before the 1997 income tax year and the person chose to treat them in a FIF in that or any subsequent year.

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