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    TaxKilnUK tax guidance
    TaxKilnUK tax guidance

    Moving Abroad → AU temp resident vs NZ transitional resident

    AU Temporary Resident (Subdiv 768-R — No 4-Year Cap) vs NZ Transitional Resident (s.CW 27 ITA 2007 — 48 Months)

    The AU temporary resident regime and the NZ transitional resident regime are separate concessional regimes in separate countries — frequently conflated. AU Subdiv 768-R ITAA 1997 exempts most foreign income and foreign capital gains from AU tax for the DURATION of a qualifying temporary visa (sub-class 482 plus select others) — there is NO statutory 4-year cap. NZ s.CW 27 ITA 2007 exempts most foreign income (excluding foreign employment income) from NZ tax for IS 48 months for new immigrants non-resident in the prior 10 years. Different statutes; different countries; different time limits; different excluded categories.

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    In plain English

    Two countries, two regimes, frequently conflated. Keep them clearly separate: AUSTRALIA — TEMPORARY RESIDENT REGIME (Subdiv 768-R ITAA 1997): If you hold a qualifying temporary visa (sub-class 482 Temporary Skill Shortage being the most common, plus several other categories), your foreign-source income (UK dividends, UK interest, UK SIPP undrawn growth) and foreign-source capital gains (sale of UK shares, sale of UK ETFs, sale of foreign property other than AU land) are EXEMPT from AU tax for the DURATION of the qualifying visa. There is NO statutory 4-year time cap. Common-published 'AU 4-year regime' framing is a confusion with the NZ regime — different country, different statute. If you switch from a sub-class 482 to permanent residence, you exit the temporary resident regime on the date of permanent residence grant — at that point your worldwide income and CGT exposure crystallise (CGT event I1 deemed disposal of foreign assets may apply on becoming a permanent resident — see /moving-abroad/australia-new-zealand/au-firb-and-property). NEW ZEALAND — TRANSITIONAL RESIDENT REGIME (s.CW 27 ITA 2007): If you are a new immigrant to NZ who was not NZ-resident for the prior 10 years, you qualify for the transitional resident regime. Most foreign-source income is EXEMPT from NZ tax for IS 48 months from the date NZ residence begins. Excluded: foreign employment income — that is taxed normally. The regime is statutorily time-limited to 48 months — at expiry you transition to full worldwide NZ taxation, and the NZ FIF (Foreign Investment Fund) regime begins to apply to UK SIPPs, UK ISAs, UK ETFs, and offshore unit trusts. You can elect out of transitional resident status (rare but available).

    How it works

    AU temporary resident — eligibility and scope

    Eligibility: (a) hold a qualifying temporary visa (sub-class 482 most common; others include sub-class 485 Temporary Graduate, sub-class 408 Temporary Activity in certain cases); (b) neither you nor your spouse are 'Australian residents within the meaning of the Social Security Act 1991' (broadly: not Australian citizens, not holders of permanent visas, not on protection visas). Scope of exemption: foreign-source income (interest, dividends, rental, business income from outside AU) and foreign-source capital gains. CGT events on foreign assets do NOT trigger AU CGT during temporary residency.

    AU temporary resident — NO 4-year cap

    The regime applies for the DURATION of the qualifying temporary visa. There is no statutory 4-year time limit in Subdiv 768-R ITAA 1997. The '4-year' framing in some practitioner marketing and older online sources is a conflation with the NZ regime — a different statute in a different country. As long as you continue to hold a qualifying temporary visa, the exemption continues.

    AU temporary resident — exit and CGT event I1

    On becoming a permanent resident (visa grant) or AU citizen, you exit Subdiv 768-R. Your worldwide income becomes fully assessable. CGT event I1 (ITAA 1997 s.104-160) applies: on cessation of foreign-resident status, a deemed disposal at market value of foreign assets that were previously CGT-excluded under Subdiv 768-R may apply. An election under s.104-165 is available to defer the I1 event. Get AU-side advice before transitioning from temporary to permanent residence.

    NZ transitional resident — eligibility

    Eligibility (s.CW 27 ITA 2007): (a) become a NZ tax resident; (b) were NOT NZ-resident for any time in the 10 years prior to becoming resident; (c) the regime starts on the date NZ residence begins and runs for IS 48 months; (d) extends automatically — no election needed; (e) you CAN elect out under s.HR 8 (rare but available — usually only chosen for FTC reasons).

    NZ transitional resident — scope and exclusion

    Exempt: most foreign-source income — foreign interest, dividends, rental, royalties, capital gains, foreign superannuation contributions and earnings (subject to standard rules on withdrawal). EXCLUDED: foreign employment income — taxed normally from NZ residence date under s.CW 27(3). At 48-month expiry: full worldwide NZ taxation; NZ FIF regime begins to apply to UK SIPPs, UK ISAs, UK ETFs, and offshore unit trusts (subpart EX ITA 2007); the de minimis is NZD 50,000 cost — below it FIF does not apply; above it the FDR (Fair Dividend Rate) 5 percent or CV (Comparative Value) methods apply.

    Trans-Tasman scenarios — temporary then transitional, or transitional then temporary

    Some movers do UK to AU on sub-class 482, then UK to NZ for a permanent move. The AU regime ends on AU departure; the NZ transitional resident regime starts on NZ residence date IF the prior-10-year non-residence test is met. UK time counts toward the 10-year window (AU time also counts only if not NZ-resident during that AU time). The two regimes are independent — eligibility for each is assessed on its own statutory test.

    Who this applies to + key conditions

    Statute + manual references

    Primary: AU: Subdivision 768-R Income Tax Assessment Act 1997. NZ: s.CW 27 Income Tax Act 2007 (transitional resident exemption) plus s.HR 8 (election out).

    Related: AU Migration Regulations (defining qualifying temporary visas); ATO ID 2011/24 (interpretive decisions on temporary resident scope); NZ FIF regime (subpart EX ITA 2007) — applies post-transitional residency; s.305-60 ITAA 1997 (AU super 6-month residency rule for transfers)

    HMRC manual: RDR1 + INTM156000+ (UK side of treaty interaction with both regimes)

    Common mistakes + traps

    Worked example

    Helena, UK national on sub-class 482 visa, Sydney, since May 2026; holds UK SIPP £500k, UK ISA £80k, UK dividend ETFs £120k

    Helena's 482 visa runs initially 4 years renewable. Her employer is considering sponsoring her permanent residence visa in year 3.

    1. Year 1-2 (sub-class 482, AU temporary resident): UK SIPP undrawn growth — exempt from AU tax under Subdiv 768-R ITAA 1997. UK ISA growth — exempt. UK dividend ETFs sold for gain — exempt from AU CGT. No 4-year cap — exemption continues for the duration of the 482 visa.
    2. Year 3 — proposed permanent residence: if Helena accepts and PR is granted, she exits Subdiv 768-R on the PR grant date. CGT event I1 considerations: deemed disposal at market value of foreign assets that were previously CGT-excluded — election under s.104-165 ITAA 1997 may defer the I1 event. Get AU specialist advice on whether to dispose pre-PR-grant (still under temporary resident exemption) or accept the I1 event and the deferred deemed cost basis going forward.
    3. If Helena stays on the 482 visa indefinitely (no PR transition): the temporary resident exemption continues with no statutory expiry — until/unless the 482 visa terminates without renewal or replacement.
    4. Contrast with NZ scenario: if Helena had instead moved to Auckland in May 2026 on a NZ work visa, she would have been a NZ transitional resident under s.CW 27 ITA 2007 for IS 48 months (assuming non-NZ-resident prior 10 years). At May 2030 the regime would expire; NZ FIF would apply to her UK SIPP / ISA / ETF holdings above the NZD 50,000 de minimis from May 2030 onwards.

    Outcome: AU Subdiv 768-R = duration of qualifying temporary visa, NO 4-year cap. NZ s.CW 27 = IS 48 months. Different statutes; different countries; different regimes. The most common mistake in this corridor is conflating the two.

    How this connects to the rest of the framework

    SRT plus AU + NZ residence tests →

    Domestic AU + NZ residence tests are the precondition for both concessional regimes.

    AU super plus UK pension →

    AU temporary resident sheltering of foreign income includes UK SIPP undrawn growth (but draws are still treaty-allocated).

    AU FIRB plus foreign property →

    AU CGT main residence + non-resident treatment interacts with Subdiv 768-R exit (CGT event I1).

    Frequently asked questions

    What happens if I miss the Self Assessment deadline?+
    The Self Assessment deadline is 31 January (online filing) for the previous tax year. Miss it and HMRC apply an automatic £100 penalty. Beyond that: £10 per day from 3 months late (capped at £900), 5% of tax due at 6 months late, and another 5% at 12 months late, under Schedule 55 of the Taxes Management Act 1970. If you have a genuine reason (serious illness, bereavement, technical issue with HMRC's systems) you can appeal with evidence; HMRC accepts reasonable excuse appeals in most genuine cases.
    Do I need an accountant or can I file Self Assessment myself?+
    Legally you can file Self Assessment yourself via gov.uk for free, most simple sole-trader returns (single income source, basic expenses) are realistic to self-file. An accountant adds real value when: your trading profit is above £40,000 (extraction-strategy decisions matter), you have multiple income streams (PAYE + self-employment + property + dividends), you've crossed the £90,000 VAT threshold, you're considering incorporation, or you have an HMRC enquiry. Expect to pay £400-£1,500/year for a typical sole-trader accountant; the cost is itself a deductible expense.
    How do payments on account work?+
    When your Self Assessment tax bill exceeds £1,000 for the first time, HMRC requires payments on account toward NEXT year's tax. Half the current bill is due 31 January (alongside the current bill); the other half is due 31 July. So your first January after crossing the threshold can hit with a double-bill: last year's balance + first payment on account. Adjust via Form SA303 if you expect next year's income to drop substantially. Payments on account don't apply if more than 80% of your tax is collected via PAYE.
    I've read in multiple places that the AU temporary resident regime is '4 years' — which is right?+
    The statutory position under Subdiv 768-R ITAA 1997 is that the exemption applies for the duration of the qualifying temporary visa with NO 4-year statutory cap. The '4-year' framing in some practitioner marketing and older online sources is a conflation with NZ s.CW 27 ITA 2007. Read the ATO's published guidance + the Subdiv 768-R statute text directly — neither contains a 4-year cap.
    Does the NZ transitional resident regime exempt my UK employment income while I work for a UK employer from NZ?+
    No. Foreign employment income is excluded from the s.CW 27 exemption under s.CW 27(3). UK employment income earned while NZ-resident (even if paid by UK employer for UK work) is taxed in NZ from NZ residence date subject to DTA Article 15 treaty mechanics on where the employment is exercised.
    What happens to my AU super if I exit the temporary resident regime via PR grant?+
    AU super itself is unaffected — preservation continues. The exit from Subdiv 768-R affects your foreign-source income and CGT exposure, not your AU domestic super pot. CGT event I1 may apply to foreign assets — separate question. Get specialist advice on PR-grant timing for both foreign-asset and super positioning.

    Free + regulated-body resources

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