Statute of Limitations NSW Re New Zealand Tax Debts

BuBerryCo on 03/02/2020 - 07:43
Last edited 03/02/2020 - 09:21 by 1 other user

Hi all,

I'm wondering if anyone is across the NSW Limitations Act 1969.

Mum moved to Sydney in 2002 from New Zealand. She updated her contact details with the NZ ird before leaving.

In 2020 she received a letter from IRD advising her she had a $1200 student loan that has now increased to 23000.

I'm aware in NSW, debts are statute barred after 6 years. However, s10 allows the Crown to pursue tax debts beyond this period.

  1. Does "crown" extend to the nz ird?

  2. I'm generally aware that in NSW, debts are not refreshed once expired. If mum wants to make a payment, does the period refresh?

Cheers

Financial

Comments

  • 87percent on 03/02/2020 - 08:09
    +7

    Not a question you should be asking the ozbargain community

  • 69 dollar dealz on 03/02/2020 - 08:16
    +5

    Generally on NZ legal actions.

    Look at the NZ limitation Act - The Australian limitation laws do not have an affect on the enforcement of NZ debts.

    Generally with a cause of action arising in NZ - the first thing you need to assess is if the cause of action is pursuable in NZ under NZ law. Valid action and not statute barred.

    If it can be pursued in NZ, generally it can be pursued in absence of the defendants(most likely) - as long they are properly served before hand.

    If it proceeds to Judgement in NZ, then that Judgement can most likely be registered in Aus and enforced as if it was an Aus Judgement (with some limited exceptions I believe) under the TRANS-TASMAN PROCEEDINGS ACT 2010.

    With respect to the specific advice you are asking for - maybe see a lawyer.

    • garetz on 03/02/2020 - 11:04

      The debt itself precedes the act, so i dont believe it is enforceable under the act you are citing.

      • 69 dollar dealz on 03/02/2020 - 11:14

        Assuming such debt judgements are not excluded from the operation of the act, and I can see nothing that says they are (but they could be given the amount the debt has increased indicates it may include some sort of penalty - which cannot always be registered), the act doesn't look to the underlying cause of action only the Judgement. The only temporal requirement is that the Judgment be registered in Aus within 6 years of Judgment in NZ.

  • Ocker on 03/02/2020 - 08:58
    +2

    WOW - a compound interest rate on the initial debt of about 17.5% is a bit lumpy!

    • KevinL on 03/02/2020 - 11:43

      Standard interest is 4% p.a. (calculated and compounded daily), however they also charge 8% p.a. on the overdue portion of the debt (so if she hasn't been making her required minimum payments, a higher rate of interest is levied in addition on those outstanding payments).

  • HighAndDry on 03/02/2020 - 09:04
    +2

    Get a lawyer, your post itself shows you're way out of your depth here. For one thing, it's far more likely than not that NZ law will apply, and not NSW law. Beyond that, and even including that, this is going to be a right mess if you try to do it yourself.

  • EightImmortals on 03/02/2020 - 09:26
    -3

    So the NZ tax nazis didn't contact your mum about this for 18 years?

  • KevinL on 03/02/2020 - 11:50
    +7

    NSW legislation has no jurisdiction over NZ student loan repayments.

    When she left the country the messaging was very clear (I was a student at the time) - student loans were interest free while you were studying, but as soon as you graduated it was charged at the standard rate - which was 7% p.a., calculated and compounded daily. In 2005 they made some changes so that borrowers who stayed and worked in New Zealand would not be charged interest, and introduced specific requirements regarding overseas borrowers.

    She needs to contact the IRD urgently to discuss her options (i.e. repayment). If not (and if she returns to NZ, even just to visit) the IRD has the authority to apply for arrest warrants for student loan defaulters leaving the country, although this is only occasionally actioned as a last resort (i.e. when the borrower refuses to set up a repayment plan).

    Additionally, the IRD and the ATO have entered into an information-sharing agreement (as of 2016) which has improved the ability for the IRD to track down student loan defaulters. Some borrowers have also been pursued via the Australian court system, so never returning to NZ doesn't get you off the hook either.

    tl;dr: your mum needs to urgently contact the IRD

  • tsunamisurfer on 03/02/2020 - 12:17

    Didn't your mum know she had a student loan in 2002?

    • BuBerryCo on 03/02/2020 - 13:04

      She thought she had paid it off in full. Her original loan was 15,000 and she had virtually paid it off.

      No she did not receive any letters or calls from ird in that 18 years we are aware of. She was in the property for which the address was updated with IRD for about 2 years. She didn't keep updating.

      • HighAndDry on 03/02/2020 - 14:44
        +1

        The above advice about contacting the IRD is valid, however I'd add to that to contact them through a (NZ) solicitor or registered tax accountant who has experience dealing with late repayments to the IRD, and not to contact them directly herself.

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