KiwiSaver and Income Tax

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Forums › Finance and wealth management › KiwiSaver and Income Tax

alisam

830 posts

Ultimate Geek

#257359 28-Sep-2019 08:04

My expectation is that when I retire I will be able to withdraw all the money and say put it in the bank, earning some interest.

Bank interest is always taxable.

My understanding is that I have been paying tax on my KiwiSaver over the life of my membership.

When I have to fill in an Income Tax Return, I assume I have to declare the proceeds from KiwiSaver as income.

What is the IRD going to tax me on. The Bank Interest or the KiwiSaver income (or both).

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wellygary

8333 posts

Uber Geek

#2326256 28-Sep-2019 08:20

When I have to fill in an Income Tax Return, I assume I have to declare the proceeds from KiwiSaver as income.

What is the IRD going to tax me on. The Bank Interest or the KiwiSaver income (or both).

Your Kiwisaver provider and Bank both have your IRD number and should be deducting tax on your behalf, they then tell IRD how much tax you have paid.

All going well this should happen in the background and you will not have to account for it again.

antoniosk

2358 posts

Uber Geek

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Lifetime subscriber

#2326548 29-Sep-2019 09:03

alisam:

My post was never about whether I should withdraw the money and put it in the bank.

It was about what would happen about the money and the IRD, if I put it in the bank.

I think this post answers my question.

Yep - as others have said, you're taxed all along the way with Kiwisaver (in fact nearly everything), with the notion being once you need it, no more tax to pay.

So if you spent a lifetime saving into Kiwisaver, it's been from your after-tax income. Any gains it's made on the way to your retirement have been taxed as well.

When you come out the other end and drawdown those funds, there is no more tax to pay.

But if you took say $100k out, and then put it into a new investment that earns income, the new earned income is liable for tax. doesn't matter where the source came from.

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Antoniosk