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Thread: Tax on Money Transfer?

  1. #1
    Join Date
    Sep 2004
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    Default Tax on Money Transfer?

    Hi All,

    When you tansfer money, does, or should the government tax you on it? Or can you transfer as much as you like, and it's a case of finding the best exchange rate?

    Thanks.

  2. #2
    Join Date
    Oct 2005
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    Default

    Daffy,

    Can you explain what you mean by "transfer"? If all you're doing is exchanging currency, there would be no tax (at least in the US).

  3. #3
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    Sep 2004
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    Default

    Sorry Richard,

    I mean if you are transferring money from say the UK to NZ, is it law to pay tax on that?

    Maybe I'm understanding the process correctly. I presume a company will give you so much NZ$ for your GBP, but when this is transferred to a NZ bank is it taxable?

    Thanks,

  4. #4
    Join Date
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    Default

    Bloomin' hope not coz it is your money and you already paid tax on it.

  5. #5
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    Default

    I think I'm understanding you now Daffy, and the answer is: no tax by the government. What you need to worry about is how much you're being charged by the bank (or other entity) to change your pounds into NZ dollars.

  6. #6
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    earth
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    Default

    NZ will not tax any incoming money you transfer. Don't know about the UK taxing outgoing money but I have never seen anyone else mention it.

  7. #7
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    Sep 2004
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    Default

    No, there is no tax at either end.

  8. #8
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    Sep 2004
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    London, UK
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    Default

    Excellent, thanks for all your feedback.

  9. #9
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    Default

    Sorry, but I think you will find that a cash balance is likely to be a "financial arrangement" in NZ tax parlance. If you have foreign currency and then you take up NZ residence, when you finally change that money into NZ$, you are subject to tax on any movement in the exchange rate from the date you enter NZ to the date you actually exchange the money. Of course if the F/X goes against, so you lose money, then you can claim this loss against your NZ income.

    Any interest earned whilst the money is out of NZ, but you are resident in NZ, will be subject to NZ income tax, as NZ residents are subject to tax in NZ on their worldwide income. If you pay tax overseas on the income, you should be able to claim a credit for that foreign tax against your NZ income.

  10. #10
    Join Date
    Oct 2005
    Location
    USA
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    Default

    Thanks for the tax tip Wannaway. I expect to have earnings denominated in foreign currency while living in NZ on PR - would I recognize gain/loss from the date of earning until the date of conversion? Sounds like a hassle, especially if I convert in dribs and drabs. But no one ever said taxes were simple...

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