Navigate Tax Troubles When Leaving NZ with AI Legalese Decoder
- April 5, 2024
- Posted by: legaleseblogger
- Category: Related News
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# Taxation of Cryptocurrencies in New Zealand
I am currently seeking information on the tax implications related to cryptocurrencies in New Zealand. Despite my efforts to find relevant information on the Inland Revenue Department (IRD) website, I have not been successful. I am hoping to obtain some guidance on this matter.
## Background Information
In 2013, I relocated to New Zealand and in 2019, I purchased $5,000 worth of cryptocurrencies through an overseas exchange. Subsequently, in 2021, I sold $2,500 of my initial investment, generating a profit for which I paid taxes, including those related to an airdrop I received. I am planning to permanently move back to the United Kingdom or the European Union later this year and will not have any sources of income or property in New Zealand.
## Current Situation and Query
Looking ahead, if I decide to sell the remainder of my initial investment while residing in the UK next year, I believe it is reasonable to declare the profits in the UK without informing the IRD. However, I am in need of further clarification on this matter. If someone could direct me to a document or provide additional information, I would greatly appreciate it.
The only link I was able to locate is [here](https://www.ird.govt.nz/cryptoassets/individual/tax-residence/non-resident), but it does not entirely align with my circumstances as I do not intend to conduct any business in New Zealand. While I acknowledge the option of hiring a tax accountant, the preferred approach for me would be to independently educate myself on this issue.
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****** just grabbed a
That link essentially reiterates the general rule of taxation of NZ tax non-residents where you’re not due to pay IRD anything if the taxable event happens whilst you’re a tax non-resident. Which logically makes sense because NZ IRD has no right to the income of random world citizens who are non-residents.
So you need to figure out your tax residency status at the time of sale of the crypto, because that’s the taxable event.
When you leave NZ permanently, after 325 (edited) days you become NZ tax non-resident and that status is backdated to the day you left. This means, depending on the timing of your departure, you’ll either need to pay IRD then claim back that money later. Or, you won’t have to pay at all.
Accountant here – you have tax issues
– taxing and timing of Crypto income
– tax residency
If you are no longer an NZ tax resident, and the investment/exchange you are using is not NZ domiciled then there will be no tax in NZ. If you are, or it is, the tax will be in NZ