Resources & Glossary

Attributing Interest

Generally, your ownership stake or rights in a Foreign Investment Fund (FIF) that potentially make you subject to the FIF rules (unless an exemption applies), like the shares in Nvidia or Apple you might hold.

Cost / Cost Basis

Typically, the original amount you paid (in NZD, including brokerage fees) to acquire your foreign investment. This is crucial for the $50,000 threshold test.

Comparative Value (CV) Method

A way to calculate FIF income based on the change in the investment's market value over the year, plus dividends and minus costs. Reflects actual gains or losses.

Quick Sale Adjustment (QSA)

A component of the FDR calculation that applies to intra-year trading (buying and selling the same investment within one tax year). The QSA supplements the base 5% FDR calculation to account for potential gains from short-term trading.

Key points about QSA:

• Only applies when you both buy and sell shares of the same investment within one tax year
• Uses FIFO (First In, First Out) accounting to match buys and sells
• Considers both your actual gain and a formula-based calculation (peak holding method)
• Always uses the lower of the two calculations
• Is capped at your actual gain to prevent over-taxation

Controlled Foreign Company (CFC)

A foreign company significantly controlled by NZ residents (usually >50% by 5 or fewer NZ residents, or >40% by one). If your investment falls under CFC rules (e.g., you own 10% or more), different tax rules apply instead of FIF.

Deemed Income

Taxable income calculated under certain FIF methods (like FDR) based on a percentage of the investment's value, regardless of whether you actually received cash income or made a capital gain during the year.

Fair Dividend Rate (FDR) Method

The most common method for calculating FIF income for shares/ETFs. It generally treats 5% of the investment's opening market value (plus any Quick Sale Adjustments) as your taxable income for the year.

FIF (Foreign Investment Fund)

Generally refers to an overseas entity like a foreign company, unit trust, or certain superannuation schemes or life insurance policies. Your investment in one of these might be subject to the FIF rules.

Market Value

The price your investment could reasonably be bought or sold for on the open market, usually based on stock exchange prices or published unit prices.

PIE (Portfolio Investment Entity)

An NZ-based investment fund (like many KiwiSaver funds or local managed funds). PIEs have their own tax rules where tax is often calculated by the manager at your PIR, capped at 28%. FIF rules don't apply directly to your investment in a PIE fund, even if the PIE itself invests overseas.

PIR (Prescribed Investor Rate)

Your individual tax rate for PIE investments (0%, 10.5%, 17.5%, or 28%).

Transitional Resident

A new migrant or returning NZer who qualifies for a temporary exemption (usually up to 48 months) from NZ tax on most foreign income, including income under the FIF rules.

IRD Guide IR461 - Foreign Investment Funds

The comprehensive guide this website often refers to. Essential reading for full details.

IRD Foreign Income Guide - IR1247

Part of a package for individuals covering various types of foreign income.

IRD Australian Share Exemption Tool

Helps check if specific ASX-listed shares likely qualify for the FIF exemption.

IRD FIF Calculation Help

IRD's general page or tool for assisting with calculations. (Note: Our calculator aims to be more user-friendly for common scenarios).

IRD Main Website

For all other tax information, guides, and forms.