An income question regarding non-residents

[Jaberwoky]

Hi again

Firstly ,I want to say thankyou to all you forumites who give your very specialized experiences and information on this site with no strings attatched - I hope that one day , I too can contribute like you guys.

Now for the buso :-)

I'm aware that if I return to NZ permanently and build houses of my own, then the project would legally need to pay me- to avoid income issues.

What if I'm simply on vacation in NZ for 5 months and are returning overseas? Any advantages ?

I'm putting together an "exit Asia" plan and don't want to learn about what I should've or could've done.

Can anyone bring any light to any issues I should be putting into the equation?

[masteraccountants]

Hi,

Your question is a little strange. If I read it rightly, you want to build houses presumably with the intention of selling them at a profit. So you would be in the business of land dealing, and be assessable for tax on the sale of the houses when they are sold.

Whether you do the business on your own account, or through a company or trust, your tax rate is likely to be less than a company or trust, so it would be best to pay tax at your individual marginal tax rate - so the company would pay you a shareholder's salary and the trust would make a taxable distribution to you. If the business is conducted on your own account, then you pay tax at your marginal tax rate on all of the profit each year.

The company or trust may allow for some tax optimization through provisional tax savings.

In New Zealand, the resident and non-resident tax rates are the same - unlike in Australia where the non-resident rates of tax are higher. So, it would not matter if you are resident or non-resident from a tax rate perspective.

If your "exit Asia" plan involves using the extra money or savings you are making to set yourself up, then don't allow tax considerations to prevent you from setting yourself up by not doing something that adds to your net wealth.

Tax rates are lower in New Zealand than in other OECD countries, and if the opportunities are there for you to realize them, your after-tax situation will be better doing the project than not doing it.