Moving from the USA to NZ: Financial Guide for High-Net-Worth Migrants

Moving from the United States to New Zealand is financially the most complex migration path covered in this series. The reason: the US is one of only two countries in the world (the other is Eritrea) that taxes its citizens on worldwide income regardless of where they live. You don't stop being a US taxpayer by leaving. You stop being a US taxpayer by renouncing your citizenship — and even that triggers an exit tax.

This means you'll be filing taxes in two countries, navigating PFIC rules that make NZ managed funds and KiwiSaver punishingly expensive from a US tax perspective, and dealing with NZ banks that may not want you as a customer because of FATCA compliance costs.

This guide covers the financial realities specific to US citizens and green card holders moving to NZ. For the general "moving to NZ" setup, see our Moving to NZ financial guide.

US worldwide taxation: it follows you everywhere

US citizens and green card holders are taxed on worldwide income by the IRS, regardless of where they live. Moving to NZ doesn't change this. You will:

• Continue filing US federal (and possibly state) tax returns every year
• Report all NZ income (salary, interest, dividends, rental income) to the IRS
• Report all NZ bank accounts and financial assets to the US Treasury (FBAR) and IRS (FATCA)
• Potentially owe US tax on income that NZ doesn't tax (because NZ has different rules)

The US-NZ double tax agreement helps prevent double taxation through foreign tax credits — NZ tax paid can generally be credited against your US tax liability on the same income. But the credit is not always a perfect offset, and some types of income fall through the gaps.

The PFIC problem: NZ managed funds and KiwiSaver

This is the single biggest financial headache for Americans in NZ. A Passive Foreign Investment Company (PFIC) is an IRS classification for any foreign entity that earns primarily passive income. Almost every NZ managed fund, ETF, and KiwiSaver scheme qualifies as a PFIC.

Why this matters: US tax law imposes punitive tax treatment on PFICs:

• Gains on PFIC shares are taxed at the highest marginal rate (37% for 2024-2026) regardless of your actual tax bracket, with no long-term capital gains discount
• An interest charge is added on top, as if the gain had been earned evenly over the holding period and tax had been deferred
• You must file Form 8621 for each PFIC you hold — every year, for every fund

KiwiSaver is a PFIC

Your KiwiSaver account is almost certainly a PFIC from the IRS's perspective. This creates an awkward situation:

• NZ employers are required to contribute to KiwiSaver (if you're enrolled)
• The NZ government contributes $521/year
• But the US taxes the growth punitively
• And you must file Form 8621 for your KiwiSaver fund every year

Mitigations:

• You can opt out of KiwiSaver (but you lose the employer and government contributions)
• You can make a Qualified Electing Fund (QEF) election on Form 8621 if your KiwiSaver provider gives you the required income statements (few do, because it's an obscure US requirement)
• You can make a mark-to-market election, treating gains as ordinary income each year (better than the default excess distribution method, but still no capital gains rate)

Investing in NZ as a US person

The PFIC rules mean that most NZ-domiciled investment products are tax-toxic for Americans. Practical alternatives:

• US-domiciled ETFs and mutual funds — held through a US brokerage account. These are not PFICs. This is the standard approach for Americans abroad.
• Individual NZ shares — buying individual NZX-listed stocks avoids the PFIC rules (stocks in operating companies are not PFICs). But this means building your own portfolio without fund diversification.
• US-listed international ETFs — if you want NZ or Australasian exposure, US-listed ETFs that hold NZ stocks are fine from a US tax perspective.

FBAR and FATCA reporting

FBAR (FinCEN 114)

If the aggregate value of all your foreign (non-US) financial accounts exceeds USD $10,000 at any point during the year, you must file an FBAR with the US Treasury. This includes:

• NZ bank accounts (cheque, savings, term deposits)
• KiwiSaver account
• NZ brokerage accounts
• Any account you have signature authority over (including business accounts)

FBAR filing is separate from your tax return. It's filed electronically with FinCEN by 15 April (with automatic extension to 15 October). Penalties for non-filing are severe — up to USD $100,000 or 50% of account balance per violation for willful non-compliance.

FATCA (Form 8938)

FATCA (Foreign Account Tax Compliance Act) requires US taxpayers living abroad to report foreign financial assets to the IRS on Form 8938 if they exceed:

• $200,000 at end of year (single filer living abroad), or
• $300,000 at any point during the year

This is filed with your tax return (not separately like FBAR). It overlaps with FBAR but has different thresholds and is filed to a different agency.

Both FBAR and FATCA apply. They're not either/or — you may need to file both.

NZ banks and FATCA compliance

NZ banks are required to report account information on US persons to the IRS under FATCA intergovernmental agreements. This creates a compliance cost for NZ banks, and some banks respond by:

• Requiring you to declare US person status when opening an account
• Requesting your US Social Security Number or ITIN
• Declining to open accounts for US persons (rare among the big five NZ banks but more common with smaller institutions)
• Refusing to provide the reporting data you need for Form 8621 (PFIC elections)

The big five NZ banks (ANZ, ASB, BNZ, Westpac, Kiwibank) will generally open accounts for US persons, but be prepared for additional paperwork and longer processing times.

The US-NZ double tax agreement

The DTA allocates taxing rights and provides foreign tax credits. Key provisions:

• Employment income: Taxed in the country where work is performed. Your NZ salary is taxable in NZ and reportable to the IRS — but you get a foreign tax credit for NZ tax paid.
• Dividends: NZ dividends to US persons — NZ can withhold up to 15%. The US taxes the dividend at your marginal rate but credits the NZ withholding.
• Interest: Taxed in both countries, with credits to prevent double taxation.
• Self-employment: Taxed in the country of residence, with complex rules for US citizens.
• Pensions/KiwiSaver: US-NZ DTA provisions for pensions are limited. KiwiSaver distributions may be taxable in both countries (with credits).

Foreign earned income exclusion (FEIE)

US citizens living abroad can exclude up to USD $126,500 (2024, indexed annually) of foreign earned income from US tax using the Foreign Earned Income Exclusion (Form 2555). You must meet either the physical presence test (330 days outside the US in a 12-month period) or the bona fide residence test.

This is often beneficial for salaried employees — your NZ salary may be largely or fully excluded from US tax. But the FEIE only covers earned income, not investment income, rental income, or KiwiSaver distributions.

Expatriation tax (exit tax)

If you decide to renounce US citizenship (or surrender a long-term green card), the US imposes an exit tax under IRC Section 877A:

• You're treated as having sold all your worldwide assets at fair market value on the day before expatriation
• Net gain above USD $866,000 (2023, indexed) is taxed at your marginal rate
• Certain deferred compensation and tax-deferred accounts have special rules
• Future gifts and bequests to US persons may be subject to a special transfer tax

You're a "covered expatriate" (subject to the exit tax) if any of these apply:

• Average annual US income tax liability over the 5 years before expatriation exceeds approximately USD $190,000 (indexed)
• Net worth exceeds USD $2 million on the date of expatriation
• You can't certify 5 years of US tax compliance

For high-net-worth individuals, the exit tax can be substantial. This is why most US tax advisers recommend extensive planning before expatriation — restructuring assets, realising losses, and timing the event.

NZ tax differences that affect Americans

Feature	United States	New Zealand
Worldwide taxation	Yes — citizenship-based	Yes — residence-based (but transitional exemption for first 4 years)
Capital gains tax	Yes — 0%/15%/20% long-term	No general CGT (bright-line for property, FIF for foreign funds)
Estate/inheritance tax	Federal estate tax above $13.61M (2024)	No estate or inheritance tax
PFIC rules	Apply to all foreign funds	Not applicable (NZ domestic concept)
Retirement accounts	401(k), IRA — tax-deferred	KiwiSaver — PIE taxed (max 28%), employer match
Sales tax/GST	State sales tax (0-10%+)	15% GST (national, no exemptions on most goods)
Top income tax rate	37% federal (+ state)	39% (from $180,001 NZD)
Healthcare	Private/employer-based	Public system (ACC for accidents, free public hospitals)

Practical considerations for financial structure

For US citizens moving to NZ, the typical financial structure is:

1. Keep a US brokerage account (Schwab, Fidelity, Interactive Brokers) for all investment activity. Buy US-domiciled ETFs and mutual funds to avoid PFIC issues.
2. Open NZ bank accounts for daily banking and NZ-dollar needs. Keep US bank accounts open for USD-denominated expenses and receiving any US income.
3. Consider KiwiSaver carefully — the PFIC cost may outweigh the employer/government benefits. Get US tax advice before enrolling.
4. File both NZ and US tax returns every year. Use a cross-border tax specialist who understands both systems.
5. File FBAR and FATCA annually — set calendar reminders, the penalties for missing these are disproportionate to the effort required.

Related guides

• Active Investor Plus Visa: Complete Guide — if you're applying for the AIP visa
• Transitional Resident Tax Exemption — 4-year foreign income exemption
• Moving to NZ: Financial Guide — practical setup for all new residents
• FIF Tax Explained — how NZ taxes foreign investment funds (relevant after transitional exemption ends)
• NZ Tax Residency Rules — how the 183-day and permanent place of abode tests work