UK Investor Guide to New Zealand Residency After the 2025 Non-Dom Reform

The non-domiciled (non-dom) regime allowed UK residents whose permanent home was elsewhere to be taxed on the remittance basis: foreign income and gains were not taxed in the UK unless brought into the country. For high-net-worth individuals with substantial offshore wealth, this was the cornerstone of UK residency planning for over two centuries. It was abolished with effect from 6 April 2025.

The replacement is the Foreign Income and Gains (FIG) regime. New UK arrivals (those who have been non-UK resident for at least ten consecutive tax years) receive a four-year window during which qualifying foreign income and gains are exempt from UK tax, even if remitted. After four years, worldwide taxation applies. The transitional protections for existing non-doms are limited and time-bound, and the inheritance tax treatment has shifted from a domicile basis to a residence basis, with a ten-year IHT tail for long-term residents who leave.

The reform has accelerated departures. HMRC's own behavioural assumptions and independent research suggest a material outflow of HNW residents, with destinations including Italy, the UAE, Switzerland, and increasingly New Zealand. For UK investors considering New Zealand, the structural parallel is useful: NZ's four-year transitional resident exemption gives new arrivals a defined low-tax window on foreign income, with no remittance trigger and no wealth tax.

The four-year clocks in each country do not run concurrently in any useful sense, since departure from the UK ends UK residence-based taxation entirely (subject to the temporary non-residence rules and the IHT tail). A UK investor who leaves in April 2025 and moves to New Zealand starts their NZ transitional period immediately, while the UK IHT tail runs in parallel. Planning must account for both simultaneously.

UK pensions present the most technically demanding workstream in any UK-to-NZ migration. The default position is that a UK SIPP or defined benefit scheme remains in the UK, with drawdowns taxed under the UK-NZ Double Tax Agreement (which generally allocates taxing rights to the country of residence, NZ, for non-government pensions). NZ taxes UK pension drawdowns, with treatment options depending on structure and applicable FIF rules.

A Qualifying Recognised Overseas Pension Scheme (QROPS) transfer is the alternative. QROPS allows a UK pension to be transferred to a recognised overseas scheme without triggering an unauthorised payment charge, provided the scheme meets HMRC's qualifying conditions. New Zealand has historically had a number of QROPS-compliant providers, though the list is dynamic and providers de-list periodically.

The Overseas Transfer Charge (OTC) is the principal risk. A QROPS transfer attracts a 25% OTC unless an exemption applies. The most relevant exemption for NZ-bound migrants is that the individual is resident in the same country as the QROPS receiving scheme. Transferring to an NZ QROPS while resident in NZ generally avoids the OTC. The rules continue to evolve, and current UK pensions advice is essential before initiating any transfer.

KiwiSaver is not a QROPS and cannot directly receive UK pension transfers. Any transfer must go to an NZ scheme that is on the published QROPS list at the time of transfer. The decision to transfer or leave in place turns on scheme charges, currency exposure, drawdown flexibility, death benefit treatment, and the relative tax outcomes. Take specialist UK pensions advice before initiating any transfer.