FIF Changes NZ: What the Proposed 2026 Rules Mean for Investors

Quick Answer: What Are the Latest FIF Changes NZ Investors Need to Know?

New Zealand’s Foreign Investment Fund (FIF) rules are subject to proposed changes in the Taxation (Annual Rates for 2026–27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill, introduced on 10 September 2026.

One of the key proposals is to increase the FIF de minimis threshold from $50,000 to $100,000 for the 2026–27 income year and later income years. The Bill also proposes changes affecting access to the Revenue Account Method (RAM).

Importantly, these proposals are not yet the law. The Bill is currently progressing through the legislative process, so investors should not treat the proposed $100,000 threshold as an enacted rule until the legislation is passed and commencement requirements are confirmed.

FIF Changes NZ in 2026

• The FIF rules apply to certain overseas investments held by New Zealand tax residents.
• The current FIF de minimis threshold is $50,000 under existing rules.
• A 2026 Bill proposes increasing the threshold to $100,000.
• The proposed $100,000 threshold would apply for the 2026–27 and later income years if enacted.
• The Bill also proposes changes to access to the Revenue Account Method.
• The proposed changes do not mean every overseas investment automatically falls outside the FIF rules.
• Investors should consider the type of investment, ownership structure, residency status and applicable FIF exemptions.

What Is FIF Tax in New Zealand?

FIF stands for Foreign Investment Fund. New Zealand’s FIF rules can apply when a New Zealand tax resident holds certain interests in foreign entities or investments.

The FIF rules are designed to calculate taxable income from certain overseas investments using prescribed methods rather than simply taxing the actual cash received from the investment.

Depending on the investment and the taxpayer’s circumstances, different FIF calculation methods may be available.

This means an investor may have FIF income for tax purposes even where they have not received a dividend or sold the investment during the year.

What Is the FIF De Minimis Threshold?

The FIF de minimis rules can provide an exemption for certain individuals whose total cost of attributing interests in FIFs is below the applicable threshold.

Under the existing rules, the threshold is generally $50,000 for qualifying interests.

The 2026 legislation proposes replacing $50,000 with $100,000 in the relevant provisions for the 2026–27 and later income years.

The proposed change is therefore particularly relevant to individuals who hold overseas shares, funds or other investments close to the current $50,000 threshold.

FIF Changes NZ: What Is Proposed for 2026?

1. Proposed increase in the FIF threshold

The proposed legislation would increase the relevant FIF de minimis threshold from $50,000 to $100,000.

The legislation specifies that this amendment would apply for the 2026–27 and later income years.

2. Changes to the Revenue Account Method

The proposed legislation also contains amendments relating to the Revenue Account Method, or RAM, which is one of the methods used to calculate FIF income or loss for qualifying interests.

The RAM generally focuses on amounts such as dividends and gains or losses associated with disposal of qualifying interests, rather than relying solely on an annual valuation-based calculation.

The detailed eligibility requirements matter. Investors should therefore assess whether their particular investment qualifies rather than assuming that RAM will automatically be available.

3. More flexibility for qualifying investors

The proposed amendments expand the circumstances in which certain taxpayers may use the Revenue Account Method for qualifying FIF interests.

The legislation contains specific definitions for RAM interests and extended RAM interests, together with rules governing when a taxpayer can elect to use the method.

4. Calculation method elections matter

FIF calculation methods are subject to eligibility requirements and election rules. Choosing a method can also affect how future income and losses are treated.

Investors should therefore consider their position before making a FIF calculation method election rather than treating the methods as interchangeable.

5. The proposed changes do not remove FIF taxation altogether

Increasing the threshold would not mean that New Zealand investors are no longer subject to FIF rules.

The proposed changes affect particular thresholds and calculation-method rules. Other provisions, exemptions and tax rules may still apply depending on the investment.

Is the $100,000 FIF Threshold Already Law?

No. As at 2 October 2026, the $100,000 threshold is a proposal contained in the Taxation (Annual Rates for 2026–27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill.

The Bill was introduced on 10 September 2026 and is progressing through the legislative process.

Until the legislation is enacted, investors should continue to consider the rules currently in force when preparing their tax position.

For the latest legislative position, refer to the official New Zealand legislation and Inland Revenue tax-policy resources listed at the end of this article.

Who Could Be Affected by the Proposed FIF Changes?

The proposed changes may be relevant to New Zealand tax residents who hold qualifying overseas investments.

Examples may include:

• Overseas shares
• Foreign investment funds
• Some overseas managed funds
• Some ETFs
• Other interests that fall within the FIF regime

The exact treatment depends on the nature of the investment, its ownership, its cost and whether an exemption or alternative tax treatment applies.

The proposed threshold should therefore not be interpreted simply as a rule that “$100,000 of overseas investments is always tax-free”.

What Happens If Your Foreign Investments Are Above $100,000?

If the proposed $100,000 threshold becomes law, investors whose qualifying FIF interests are above the relevant threshold may still need to calculate FIF income under the applicable rules.

The calculation method will depend on the type of investment and whether the investor meets the requirements for a particular method.

A portfolio above the threshold does not necessarily mean the investor pays tax at the same rate as their investment return. FIF calculations are governed by specific tax rules.

How Is FIF Income Calculated?

FIF income can be calculated using different prescribed methods, depending on the taxpayer and the nature of the interest.

Common FIF calculation methods include:

• Fair Dividend Rate (FDR)
• Comparative Value (CV)
• Revenue Account Method (RAM), where the taxpayer qualifies
• Other methods that may apply in specific circumstances

The appropriate calculation method can materially affect the amount of FIF income or loss calculated for an income year.

This is one reason why overseas investment tax should be reviewed based on the investor’s actual circumstances rather than using a generic percentage or online estimate.

What Is the Revenue Account Method?

The Revenue Account Method (RAM) is a FIF calculation method that can apply to qualifying interests.

Under the RAM framework, relevant income can include dividends and amounts associated with gains or losses on disposal, subject to the legislation and applicable eligibility rules.

The 2026 proposed legislation contains changes to the eligibility framework for RAM and introduces concepts including RAM interests and extended RAM interests.

RAM should not be assumed to be available simply because an investor prefers a realisation-based approach. The statutory eligibility requirements need to be considered.

FIF Changes NZ Example

Consider an investor who holds a portfolio of qualifying overseas investments.

If the portfolio is below the existing $50,000 de minimis threshold and all relevant requirements are met, the investor may be able to use the applicable exemption under the current rules.

If the proposed legislation is enacted and the threshold increases to $100,000, an investor whose qualifying portfolio is between $50,000 and $100,000 could potentially fall within the revised threshold.

However, the actual tax treatment depends on the investment, its cost, ownership and the applicable legislation. The example is intended to explain the proposed threshold change, not to provide an individual tax calculation.

Are All Overseas Shares Subject to FIF?

No. The FIF rules contain exemptions and specific provisions that can affect whether an overseas investment is subject to the FIF regime.

Some investments may be excluded or treated differently depending on their characteristics, ownership and the taxpayer’s circumstances.

For example, certain interests in Australian-resident companies can be subject to specific rules, while other investments may qualify for exemptions.

Investors should therefore assess the specific investment rather than applying the FIF rules to every overseas asset automatically.

How Do FIF Rules Apply to ETFs and Managed Funds?

Overseas ETFs and managed funds can potentially fall within the FIF rules.

The treatment depends on the structure and jurisdiction of the fund, the nature of the taxpayer’s interest and any applicable exemption.

An investor should check the tax treatment of the actual fund rather than assuming that an ETF is treated the same way as a direct shareholding.

What Records Should NZ Investors Keep for FIF?

Good investment records make FIF calculations and tax return preparation significantly easier.

Keep records such as:

• Investment purchase dates
• Purchase prices and transaction costs
• Number of shares or units held
• Investment statements
• Broker statements
• Dividends received
• Sales and disposal information
• Foreign currency information where relevant
• Details of transfers between investment accounts
• Evidence supporting any FIF exemption or calculation method used

Keeping records throughout the year is generally easier than reconstructing an overseas investment portfolio when the tax return is due.

How Should Investors Prepare for the FIF Changes?

Investors can start by reviewing their overseas investment portfolio and understanding how the proposed rules could affect them if enacted.

1. List all overseas investments.
2. Record the cost and acquisition date of each investment.
3. Identify investments that may fall within the FIF regime.
4. Check whether an exemption currently applies.
5. Review the total cost of relevant FIF interests.
6. Understand which FIF calculation method applies.
7. Review whether the proposed RAM rules could be relevant.
8. Keep supporting investment and tax records.
9. Monitor the progress of the 2026 legislation.

If your overseas portfolio is significant or complex, professional tax advice can help you understand which rules apply before you file your return.

Common FIF Tax Mistakes

1. Assuming FIF only applies when you sell

FIF taxation can use prescribed calculation methods, meaning taxable FIF income may arise even when an investment has not been sold.

2. Assuming every overseas investment is treated the same

Different investments can have different tax treatments and exemptions.

3. Treating the proposed $100,000 threshold as current law

The proposed increase has not automatically become law simply because it has been included in a Bill.

4. Ignoring investment costs

The FIF de minimis rules are based on the relevant statutory tests, including the applicable cost threshold. Accurate investment records are therefore important.

5. Choosing a calculation method without checking eligibility

FIF methods have specific eligibility requirements. The Revenue Account Method is not automatically available to every investor.

How FIF Fits Into Wider NZ Tax Planning

FIF taxation is only one part of an investor’s wider tax position.

If you own investments through a business, trust or other structure, or have multiple sources of income, the overall tax treatment may require a broader review.

You may also want to review your:

• Business profitability
• NZ tax planning
• Cash flow forecasting
• NZ tax compliance

Why Do the FIF Changes Matter?

The proposed FIF changes could affect how some New Zealand investors assess and report overseas investments.

The proposed increase in the de minimis threshold could be particularly relevant to investors whose qualifying overseas investments are currently close to the $50,000 threshold.

The proposed changes to the Revenue Account Method may also be relevant to investors who hold qualifying interests and want to understand whether RAM could apply to their situation.

However, the proposals need to be considered alongside the final legislation and the investor’s individual circumstances.

Frequently Asked Questions About FIF Changes NZ

What is the new FIF threshold in NZ?

A 2026 Government Bill proposes increasing the FIF de minimis threshold from $50,000 to $100,000 for the 2026–27 and later income years. As at 2 October 2026, this is proposed legislation rather than an enacted change.

When will the $100,000 FIF threshold start?

The Bill proposes that the change would apply for the 2026–27 and later income years. The proposal remains subject to the legislative process.

What does FIF stand for?

FIF stands for Foreign Investment Fund.

Does FIF apply to overseas shares?

Certain overseas shareholdings can fall within the FIF rules. Whether FIF applies depends on the investment and whether an exemption or other provision applies.

What is the FIF Revenue Account Method?

The Revenue Account Method is a FIF calculation method available for qualifying interests where the statutory requirements are satisfied. The 2026 legislation proposes changes to the circumstances in which it can be used.

Is the FIF $100,000 threshold law yet?

No. As at 2 October 2026, the $100,000 threshold is contained in a Bill and has not yet become an enacted law.

Do I need to pay tax on overseas investments under FIF?

Depending on the investment and your circumstances, FIF rules may require income to be calculated under one of the prescribed FIF methods. Exemptions and other rules can also apply.

Should I speak to an accountant about FIF?

If you have a substantial overseas investment portfolio, multiple investment types, residency considerations or uncertainty about which FIF method applies, professional tax advice can help you assess your position.

FIF Changes NZ: Key Takeaways

• The existing FIF framework continues to apply to qualifying overseas investments.
• The current de minimis threshold is $50,000 under the existing rules.
• A 2026 Bill proposes increasing that threshold to $100,000.
• The proposed $100,000 threshold would apply from the 2026–27 income year if enacted.
• The Bill also proposes changes affecting access to the Revenue Account Method.
• The proposed changes are not yet the same as enacted law.
• Investors should review their portfolio, records and applicable FIF calculation method.

FIF Tax Advice in Auckland and Wellington

DFK Orb360 O’Halloran provides accounting, tax and business advisory services for individuals and businesses across New Zealand.

Our team can help you understand your tax obligations, review your investment structures and prepare the relevant calculations and records.

Contact DFK Orb360 O’Halloran to discuss your requirements.

FIF Tax Checklist for NZ Investors

• ☐ List your overseas investments.
• ☐ Record acquisition costs and dates.
• ☐ Identify investments potentially subject to FIF.
• ☐ Check applicable exemptions.
• ☐ Review the current FIF threshold.
• ☐ Monitor the proposed $100,000 threshold.
• ☐ Check which FIF calculation method applies.
• ☐ Review whether RAM could apply.
• ☐ Keep broker and investment statements.
• ☐ Keep records of dividends and disposals.
• ☐ Review your tax position before filing your return.

About This FIF Changes NZ Guide

This article has been prepared by DFK Orb360 O’Halloran to explain the proposed 2026 FIF changes in practical terms for New Zealand investors.

The article distinguishes between existing FIF rules and proposed legislative changes. The proposed $100,000 threshold and related amendments should be checked against the legislation as it progresses.

Official NZ FIF Tax Resources

• New Zealand Legislation – Taxation (Annual Rates for 2026–27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill
• New Zealand Legislation – 2026 FIF Bill highlights
• Inland Revenue Tax Policy – 2026 FBT Simplification and Tax Bill

Disclaimer

This article is provided for general information only and does not constitute personalised tax, accounting or financial advice. Tax legislation can change, and proposed legislation may be amended before enactment. Investors should obtain professional advice based on their individual circumstances before making tax or investment decisions.