NZ tax · Reviewed 2026-05-02
The NZ$50,000 de minimis exemption.
If the total cost base of your foreign-listed shares stays under NZ$50,000, you may be able to ignore FIF entirely and pay tax only on actual dividends received. The threshold is per-individual and tested at any point during the year — easy to trip over.
How it works
If the total cost base in NZD of all your foreign-listed equity holdings stays under NZ$50,000 throughout the tax year (1 April – 31 March), the FIF regime does not apply[1]. Instead, you declare actual dividends received as foreign income on your IR3, taxed at your marginal rate.
The exemption is per individual and per tax year. Cross the threshold even briefly — a single purchase that takes you from NZ$48,000 to NZ$52,000 — and FIF applies for the whole year, retroactive to 1 April[2].
The joint-account trap
Splitting cost base between partners — done right
The threshold is per individual. A couple can each hold up to NZ$49,000 of foreign cost base for a combined NZ$98,000 — both sit under de minimis, neither triggers FIF.
The trap: a single joint account is presumed 50/50 unless documented. NZ$80,000 in a joint Hatch account = NZ$40,000 per person → both under the threshold, no FIF. NZ$120,000 in the same joint account = NZ$60,000 per person → both over, FIF applies to both. The fix is sometimes as simple as opening separate accounts or formalising a documented unequal split.
This is one of the corners of NZ tax where structure choice meaningfully affects the bill — talk to an adviser if you're near the line.
Practical implications
- Mix US-listed and NZ-listed strategically. NZX PIE funds (USF, NZ20, FNZ) don't count toward the threshold. You can hold unlimited NZ-listed exposure without crossing the line.
- Track NZD cost, not USD cost. The threshold is denominated in NZ dollars — a falling NZD increases your cost base in NZD terms even if you bought no new shares. Re-check after big FX moves.
- Sales reduce cost base. If you sell down US-listed holdings to drop back under, FIF may not apply for the year — but check the timing and consult an adviser before relying on this.
- Australian shares carve-out. ASX-listed Australian-resident-listed companies are usually exempt from the FIF cost-base count under a separate rule, but the carve-out has conditions — verify per company.
Sources
- [1]FIF — when FIF rules apply (NZ$50,000 threshold) — Inland Revenue (NZ) (2026)
- [2]IR461 — Foreign investment funds (full guide) — Inland Revenue (NZ) (2026)
FAQ
Is the NZ$50,000 measured at year-end or at any point?⌄
At any point during the tax year (1 April to 31 March). If your cost base touched NZ$50,001 even briefly, FIF applies for that whole year. Conservative practice is to leave a buffer below the threshold rather than tracking the cost base daily.
Does the threshold apply per individual or per couple?⌄
Per individual NZ tax resident. A couple can each hold NZ$49,000 for a combined NZ$98,000 without triggering FIF — provided the legal ownership is split. Joint accounts default to a 50/50 split unless documented otherwise. Watch the trap if one person's share crosses the threshold.
Are NZX-listed ETFs counted toward the threshold?⌄
No. NZ-domiciled PIE funds — including all Smartshares and Kernel ETFs — sit outside the FIF regime entirely. Only foreign-domiciled holdings (US-listed ETFs, foreign mutual funds, direct foreign shares) count toward the NZ$50,000 cost base.