Tax residency case overturned

A recent Taxation Review Authority (TRA) case concluded an individual was a New Zealand tax resident despite being absent from New Zealand for a long period of time. In brief, the decision was a consequence of having an investment property that was ‘available’ to him in New Zealand and an on-going relationship with his family and ex-wife.

On appeal to the High Court, the TRA’s decision has been overturned. The High Court held that the individual was not a New Zealand resident as he had never lived in the New Zealand investment property; therefore it could not be regarded as his ‘home’. Although he did have other on-going, personal connections with New Zealand, in the absence of having a ‘home’ or ‘house’ in New Zealand, these connections did not alter the conclusion reached.

This case provides a sigh of relief, as the original TRA decision was of some concern. Although every individual’s situation is different, the High Court decision should give New Zealanders living and working overseas with an investment property in New Zealand some peace of mind.

See winter 2014 article Home is where the heart is for the original decision.

Published Summer 2014.

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