FIF Calculator NZ 2026
This Foreign Investment Fund calculator uses the Fair Dividend Method, which is also known as the FDR method to calculate the FIF income.
This method is available for use if:
- the interest is not attributed to ordinary shares
- the market value of the investment portfolio is known at the start of the tax income year.
According to the IRD, for the FDR method - "if a person uses the annual method, they will generally be taxed on 5% of the opening market value of their attributing interests in foreign companies. Dividends and capital gains are not usually taxed separately. However, this does not apply to fee rebates, which should be returned as additional income."
It is also important to note that "if a person decides to use the FDR method for one investment, then they must use this method for all their FIF investments that year unless the legislation prevents them from doing so."
One of the aspects of the FDR FIF calculation method is the 'Quick Sale Adjustment', which "is an extra amount calculated when a person buys and sells an attributing interest in the same FIF in the same income year and makes a gain."
The FDR method does not take into account sales and purchases unless the shares in that attributed interest have the sales and purchase within the same year. If this occurs the quick sale adjustment calculation is required to be made to adjust for the sales within the period. The quick sale method is the addition of any additional income to the already calculated opening market value * 5%. The FIF calculator below calculates this for you.
In an example of how the foreign investment fund calculator works below, we can use a standard example across the five methods to see how the return differs.
Person A has $100,000 as the 'Opening Market Value ($)' which is the total of the market values of the share of the foreign investment funds at the beginning of the tax year. The 'Opening Number of Shares' (number) that they held was 10,000 at the start of the year, however, during the year this fluctuated upwards to 15,000 shares which was their 'Largest Shareholding During The Tax Year' (number), but ended up at 13,000 shares which was their 'Closing Number of Shares' (number). The total 'Number of shares acquired during the tax year' was said to be 7,000 shares. We have established the start of year market value, and we have the share counts across the start, peak and close of the financial year.
We also need the 'Value of shares acquired during the year' which in our example is $154,000. For the sales of shares, or the 'Number of shares disposed of following acquisitions' the count was 4,000. The 'Value of shares disposed of following acquisitions' was $100,000.
Looking at the example above the 'Difference between opening and peak'was 5,000 shares (15,000 peak - 10,000 opening count), the 'Difference between closing and peak' was 2,000 shares (15,000 peak - 13,000 closing count) and the 'smallest difference' between those two was 2,000 which was the difference between closing and peak.
In terms of the 'Average value of shares acquired' that worked out to be the $154,000 spent on the 'Value of shares acquired during the year' divided by the 7,000 'Number of shares acquired during the tax year'. This equates to and average value of $22.00 per share.
In our example, as we now know the average value of shares acquired in the period, which was $22.00, we can multiply that by the smallest difference of 2,000 to get $44,000. Taking 5% of this end up with a 'Peak holding adjustment' of $2,200 (A).
The 'actual gain' is calculated as the ['Value of shares disposed of following acquisitions'], which was $100,000 minus the ['Number of shares disposed of following acquisitions' (4,000) multiplied by the 'Average value of shares acquired' ($22.00)] which equals $100,000 - (4,000*$22.000), or $100,000 - $88,000 which is $12.000 (B). The quick sale adjustment is the smaller of the two values of (A) $2,200, and (B) $12,000 above.
The end calculation for the FIF income is the opening value of $100,000 multiplied by the 5% rate which equates to $5,000, plus the quick adjustment value from (A) above which was $2,200 resulting in an income of $7,200 for the period. With a user specific tax rate of 33%, this generates a FIF income via the FDR method of $2,376.
NOTE: This calculation will need to be undertaken for each of the attributing interests that you hold shares in, it cannot be completed at an aggregate level.
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Opening Market Value ($)
This is the total of the market values of the share of the foreign investment funds at the beginning of the tax year, which starts on April 1st.
Opening Number of Shares (number)
This is the total number (count) of the shares in the foreign investment funds at the beginning of the tax year, which starts on April 1st.
Largest shareholding during the tax year (number)
This is the largest number of total number (count) of the shares in the foreign investment funds at the beginning of the tax year. If there are no share purchases during the year this will be the same as the opening number (count) of shares. If there are no share sales during the year this will be the same as the closing number (count) of shares.
Closing Number of Shares (number)
This is the total number (count) of the shares in the foreign investment funds at the beginning of the end of the tax year which is on March 31st.
Number of shares acquired during the tax year
This the total number of shares acquired during the tax year.
Value of shares acquired during the year
This the total value of shares in dollars acquired during the tax year from April 1st to March 31st of the next calendar year.
Number of shares disposed of following acquisitions
This is the total number (count) shares disposed of which followed aquistions earlier in the tax year.
Value of shares disposed of following acquisitions
This is the total value shares disposed of which followed acquistions earlier in the tax year.
Difference between opening and peak
Smallest difference?
Difference between closing and peak
Average value of shares acquired
Peak holding adjustment
Actual gain
Quick Sale Adjustment
The quick sale adjustment is an extra amount calculated when a person buys and sells an attributing interest in the same FIF in the same income year period, and makes a gain.
Income
Tax rate
Tax
The Fair Dividend Rate is the default way New Zealand taxes most foreign shares, and it does something people find counterintuitive: it taxes you on a deemed return rather than on what your shares actually did. Once the cost of your overseas shareholdings passes the Foreign Investment Fund threshold, you stop returning dividends and gains in the ordinary way and instead return 5% of what the holding was worth at the start of the tax year, whether it rose, fell or paid you nothing at all. That is the trade for a rule that would otherwise have to track every dividend and disposal across dozens of markets. This calculator works out the FDR income for a portfolio, including the quick sale adjustment that catches shares bought and sold inside the same year, which is the part most people miss. FDR is not the only method available, and for a year in which your portfolio fell you are very unlikely to want it, so the comparison with the Comparative Value method matters as much as the FDR figure itself.
How the Fair Dividend Rate works
Take the market value of your foreign shares on the first day of the tax year and multiply by 5%. That is your FDR income for the year, regardless of dividends received or the price on any other day. Shares you held for the whole year need nothing else.
Shares bought and sold within the same year are not in the opening value, so they would escape entirely. The quick sale adjustment closes that: it adds the lesser of the actual gain on those trades or 5% of their cost, so a share traded inside the year is taxed on a comparable basis to one held throughout.
Worked example
These are the figures this page shows when you open it, before you change anything.
The portfolio is worth $100,000 at the start of the tax year. FDR of 5% on that opening value gives $5,000 of income. The quick sale adjustment on shares traded within the year adds $2,200, taken as the lesser of the actual quick sale gain and 5% of the quick sale cost. Total FIF income is therefore $7,200.
That $7,200 is added to your other income and taxed at your marginal rate. It is income, not a separate tax, which is why two people with identical portfolios can owe quite different amounts.
When FDR is the wrong method
FDR charges 5% of the opening value even in a year the portfolio lost money, which is the situation where people are most surprised by a tax bill. Individuals and family trusts may instead use the Comparative Value method, which taxes the actual change in value plus distributions, and may choose the lower result each year. In a falling year Comparative Value can produce nil income where FDR produces a substantial figure.
The choice is made per year rather than locked in, but it must be applied consistently across the whole portfolio for that year rather than picked per holding.
Related guides
- FIF and FDR Method for Foreign Investments - NZ: how this method works and when it applies.
- FIF Tax Explained Guide: the wider foreign investment fund rules.