Skip to main content
Inland Revenue

Tax Policy

Further guidance

No clause

Issue: Formula method example in bill commentary


(New Zealand Law Society, PricewaterhouseCoopers)

The example in the bill commentary does not illustrate how the “grow rate” should operate. This should be provided in further guidance (New Zealand Law Society).

The example in the bill commentary incorrectly refers to the value of the interest at the time of migration, rather than at the beginning of the assessable period. The commentary should be clarified to prevent any mismatch (PricewaterhouseCoopers).


The example in the bill commentary relating to the formula method only covers the formulae in proposed CF 3(9)–(12). This can be found on page 15 of the bill commentary. The calculation of the “grow rate” found in proposed CF 3(13)–(15) were not provided due to the length of the example.

Officials agree with the submission that the remainder of the example should be published in a guidance document.

The example sets out a scenario for “Thomas”. It states that “Thomas migrates to New Zealand with a foreign superannuation scheme worth NZ$100,000”. Thomas would receive a four-year exemption period so to use the formula method, Thomas would need to know the value of the fund at the end of his exemption period (and beginning of his assessable period). The current drafting achieves this, but the example is incorrect. The example should state that the scheme was worth NZ$100,000 at the beginning of his assessable period once his exemption period had expired.

Officials agree that this error should be corrected in future guidance.


That the submission be accepted.

Issue: Publication of the proposed changes


(KPMG, PricewaterhouseCoopers)

The proposed changes, once enacted, should be publicised as widely as possible.


Inland Revenue is working on a communication strategy for the proposed changes, which will explain the changes to affected taxpayers. The messages will depend on what a person’s circumstances are. The communications strategy will take into account Inland Revenue’s range of communication methods, including working with relevant industries and practitioners.


That the submission be noted.