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You are responsible for calculating your AWA and making sure the information you provide is correct. i-Select can explain the Scheme Pays process, but we cannot calculate or confirm your personal tax position. You may wish to speak with a qualified New Zealand tax adviser. Our Assessable Withdrawal Amount Calculator may help you estimate the taxable portion of your transfer, but it does not replace personalised tax advice.
Scheme Pays is an optional way to pay any New Zealand tax that applies to your overseas pension transfer. Instead of paying the tax from your personal savings, you can ask i-Select to deduct it from your transferred pension funds and pay it directly to Inland Revenue.
The tax is calculated at 28% of your Assessable Withdrawal Amount - the portion of your transfer that is taxable in New Zealand. Provided the information supplied is correct, this is a final tax payment and you do not include the amount as income in your tax return.
The Assessable Withdrawal Amount, or AWA, is the portion of your overseas pension transfer that is treated as taxable income in New Zealand. The amount will depend on your personal circumstances, including how long you have been a New Zealand tax resident.
Scheme Pays may be available for eligible overseas pension transfers received by the i-Select Superannuation Scheme on or after 1 April 2026, where some or all of the transfer is taxable in New Zealand.
It can apply to qualifying UK and other overseas pension transfers - it is not limited to UK pensions. We will contact you when your transferred funds are received and explain the election process.
No. Scheme Pays is optional.
You can choose to pay the tax yourself instead. This means including your Assessable Withdrawal Amount in your personal tax return and paying tax at your individual marginal tax rate.
A Scheme Pays election must be made within 10 working days of the transfer. Once you have made the election, it cannot be cancelled or changed, so it is important to check your information carefully before submitting it.
Not necessarily. The 28% rate applies to your Assessable Withdrawal Amount, not automatically to the full value of your pension transfer.
For example, if your total transfer is NZ$200,000 but your Assessable Withdrawal Amount is NZ$50,000, the Scheme Pays tax would be:
NZ$50,000 × 28% = NZ$14,000
The NZ$14,000 would be deducted from your transferred funds and paid to Inland Revenue.
Your Assessable Withdrawal Amount, or AWA, is the portion of your overseas pension transfer that is treated as taxable income in New Zealand. It is usually calculated using the schedule method, although the formula method may be available in some circumstances.
You are responsible for calculating your AWA and making sure the information you provide is correct. This calculator can help you estimate the amount, but i-Select cannot calculate, confirm or verify your personal tax position. You may wish to obtain advice from a qualified New Zealand tax adviser.
The 10-working-day deadline is set by New Zealand tax law - it is not an i-Select processing deadline.
To use Scheme Pays, you must provide your Assessable Withdrawal Amount and make your election within 10 working days of the transfer. If the deadline is missed, Scheme Pays cannot be applied and you will generally need to declare the taxable amount and pay the tax yourself.
Because the time-frame is short, it may be helpful to calculate your AWA or arrange tax advice before your pension transfer arrives.
With Scheme Pays, tax is deducted from your transferred pension funds at a flat rate of 28% of your Assessable Withdrawal Amount and paid directly to Inland Revenue. Provided the information is correct, the tax is final and you do not include the amount in your personal tax return. It also does not affect Working for Families, FamilyBoost, student-loan obligations or child-support calculations.
If you pay the tax yourself, you include your Assessable Withdrawal Amount in your tax return and pay tax at your individual marginal tax rate. You will need to fund the payment yourself, and the additional income may affect some entitlements or obligations.
The most suitable option will depend on your circumstances. i-Select cannot recommend which option you should choose.
Some new or returning New Zealand tax residents may qualify for a four-year exemption from tax on overseas pension lump sums.
If your transfer is received during your exemption period, it will generally not be taxable in New Zealand. Your Assessable Withdrawal Amount should therefore be NZ$0 and no Scheme Pays tax would be deducted.
The exemption period is based on New Zealand tax-residency rules, not simply the date you arrived in the country. It may also depend on whether you have previously used the exemption, so you should obtain tax advice if you are unsure whether you qualify.