FIF Method Comparison Calculator NZ

This calculator helps New Zealand investors with overseas shares work out which foreign investment fund tax method gives the lower taxable result, the fair dividend rate or the comparative value method, so you are not left guessing which one to use each year. You enter the opening market value of your FIF portfolio, the closing market value, any dividends received, and your marginal tax rate. From these figures, the calculator works out your taxable income under the fair dividend rate, a flat 5 percent of the opening value regardless of performance, and under the comparative value method, the actual change in value plus dividends, floored at zero. It then shows which method is lower, displays both income figures side by side, and estimates the tax payable on the lower of the two at your chosen rate. Individuals can generally use whichever method gives the lower result across their FIF portfolio each year, and the two methods tend to suit different market conditions, so it is worth checking both rather than defaulting to one. Use the result to gauge roughly how much tax you might owe on overseas shares and which method suits a strong or a flat year. The FIF rules are complex and the thresholds are set by Inland Revenue, so treat this as an indicative estimate only and get professional tax advice for your actual return.

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Fair dividend rate is lower
lower taxable income method (individuals can generally use the lower)
Fair dividend rate income$5,000
Comparative value income$14,500
Tax on the lower$1,650

Fair dividend rate taxes 5% of the opening market value. Comparative value taxes the actual change in value plus dividends, and is not less than zero. Individuals can generally use the lower across their FIF portfolio. The 5% rate, the threshold and the rules are set by Inland Revenue and the FIF area is complex, so check current rules or get advice. Estimate only, not tax advice.

How it works

Under the fair dividend rate method, your taxable income is a flat 5% of the market value at the start of the year, regardless of the actual return. Under the comparative value method, your taxable income is the actual increase in value over the year plus any dividends, and it cannot be negative. The calculator works out both and applies your tax rate to the lower, which is generally what an individual can use across their portfolio. The two methods favour different years, so comparing them matters.

Worked example

On a $100,000 opening value, the fair dividend rate income is $5,000. If the holding rose to $112,000 with $2,500 of dividends, the comparative value income is $14,500. The fair dividend rate is lower here, so an individual would generally use that, paying tax on $5,000 rather than $14,500.

Related calculators

Data sources: the rates and thresholds on this page are maintained against Inland Revenue. Figures are checked twice monthly.

Frequently asked questions

What are the FIF tax methods?

The two common methods for individuals are the fair dividend rate, which taxes 5% of the opening market value, and the comparative value, which taxes the actual gain plus dividends. Individuals can generally use the lower of the two across their portfolio.

Which FIF method should I use?

Generally the one giving the lower taxable income, which individuals can usually choose across their whole FIF portfolio. In a year of strong gains the fair dividend rate is often lower; in a flat or down year the comparative value can be lower.

When do the FIF rules apply?

The FIF rules generally apply when your overseas shares cost more than a threshold set by Inland Revenue. Below that, normal dividend taxation applies. Check the current threshold and rules, as the FIF area is complex.