In New Zealand the money you contribute into your superannuation fund has already been taxed and the superannuation fund manager pays tax on the growth of your superannuation funds. The capital at maturity is tax free. Pensions in New Zealand are not taxed. This is referred to as Taxed, Taxed Exempt (TTE). When you are paid an Income for Life it is not taxable.
On 1 April 2014 the new Taxation and Remedial Matters Act came into force. The purpose of the Act was to make it easier to understand how much tax you are required to pay on your UK pension funds when you bring them to New Zealand. The new Act is retrospective so if you didn't pay tax on a pension when you brought it to NZ you have to now. From April 2015 IRD will be less tolerant to those who haven't 'come clean'. Tax penalties may be applied.
Refer to the IRD table at the end of the Case Study which shows how your tax liability will increase each year after you cease to be a transitional tax resident:
To identify your tax liabilities we recommend you seek advice from a specialist tax adviser. Contact Lyfords who will direct you to a competent accountant. Your fee will only be $500 +GST for a report (from the accountant) telling you what you need to do. Or, ask your accountant if they have specialist knowledge in this area. You do not want to pay to train someone.
 The amount paid for Income for Life varies based on ten year bond rates. Currently 3.25% is being used.
The amount paid is reviewed every 3 years. From age 75 it is reviewed every year.
Income for Life is paid until the death of the member and the residue is paid to the estate.
If you start your Income for Life at age 65 you would be paid a non taxable income based on $61 per $1,000. If you defer until age 70 the income will increase to $70 per $1,000.
Example: if you have $500,000 to purchase an Income for Life you would be paid $30,500 at age 65 or $35,000 at age 70.