Calculating FIF Income
Choose the right starting point first. FIF calculations are easier once you know whether you need a threshold check, a method comparison, or RAM guidance.
I might be under the cost threshold
Check the cost threshold before doing a full FIF calculation.
Most common path
I need FDR/CV for ordinary shares
Use the calculator for opening values, transactions, closing values, and method comparison.
Open calculatorI recently became a New Zealand tax resident
Check whether current or proposed Revenue Account Method rules may matter before choosing a calculation path.
I am ready to file
Review records, disclosure, exchange rates, and overseas income summary checks.
Do I Need to Calculate FIF Income?
Once you have checked the thresholds and exemptions, you generally need to calculate FIF income if:
- 1 You are a New Zealand tax resident (and not currently a transitional resident).
- 2 You hold investments that are considered attributing interests under the FIF rules (like shares in a foreign company such as Nvidia or Apple).
- 3
You are not exempt, meaning either:
- •The total cost of your attributing interests went above the relevant threshold at any point during the tax year. Current IR461 guidance uses NZ$50,000; Budget 2026 proposes NZ$100,000 from 2026-27.
- •You choose to opt into the FIF rules even if under the threshold.
- •AND other specific exemptions (like the ASX one) don't apply to those particular investments.
If those points apply, you will need to choose a method and include the calculated FIF income in your tax return.
Overview of Calculation Methods
IR461 lists six FIF calculation methods: fair dividend rate (FDR), comparative value (CV), cost method (CM), deemed rate of return (DRR), revenue account method (RAM), and attributable FIF income. For many individual investors dealing with ordinary listed foreign shares or ETFs, the main two methods encountered are:
Fair Dividend Rate (FDR)
Calculates income based on 5% of opening market value, plus any quick sale adjustment.
Comparative Value (CV)
Calculates income as closing market value plus gains, minus opening market value plus costs.
Revenue Account Method (RAM)
IR461 includes RAM from 1 April 2025 for eligible individuals and family trusts. Budget 2026 proposes wider access from 2026-27, including all residents' unlisted foreign shares and extended RAM for concurrent-tax residents. RAM taxes dividends and qualifying gains on disposal from qualifying FIF interests, with gains and losses on disposal reduced by 30% before marginal tax is applied. Learn more about RAM →
Other methods have specific criteria. CM can apply where FDR is allowed but opening market value is not practical to determine except by independent valuation. DRR is limited to certain non-ordinary shares where CV is not practical. The attributable FIF income method generally requires a 10% or more income interest and sufficient information for modified CFC-style calculations, though Budget 2026 proposes continuity for some active investors diluted below 10%. This page focuses on FDR and CV.
FDR Method Explained
The Fair Dividend Rate (FDR) method is often the default or most common method used for listed shares and ETFs.
How it works
- •You calculate 5% of the total opening market value (the value on the first day of your income year, usually April 1st) of all your FIF investments using FDR.
- •You also add any quick sale adjustment if shares in the same FIF were increased and decreased during the year and there was a gain.
- •Generally, actual dividends received during the year are not taxed separately when using FDR (though fee rebates might be).
Pros
- ✓Relatively simple calculation if you know the opening market values.
- ✓Base FDR income is 5% of opening market value even if investments performed much better.
Cons
- ✗You can have FIF income to pay even if investments lost value or paid no dividends.
- ✗You generally cannot claim a tax loss using FDR.
- ✗The Quick Sale Adjustment can add extra work if you trade during the year.
Quick Sale Adjustment
- •Applies where shares or units in an attributing interest are increased and decreased in the same income year and there is a gain.
- •Adds an extra amount to the base 5% FDR calculation. You calculate the lesser of:
- 1.The actual gain from each disposal, to the extent it follows acquisitions made earlier in the income year.
- 2.The peak holding method amount: 5% × peak holding differential × average cost of units bought during the year.
Our FIF Calculator can estimate this for common ordinary-share cases. IR461 page 15 also has a worked example.
CV Method Explained
The Comparative Value (CV) method calculates your FIF income based on the actual change in the value of your investments plus any distributions.
How it works
- •The basic idea is: closing market value, plus sale proceeds and distributions, minus opening market value and purchase costs.
- •This calculation aims to reflect your actual economic gain or loss for the year on those investments.
Pros
- ✓More closely matches the actual performance of your investments.
- ✓If your investments made a loss for the year, this method will reflect that.
Cons
- ✗You need accurate opening and closing values, plus records of all purchases, sales, and distributions.
- ✗Use for standard listed shares/ETFs is generally limited to individuals and certain types of trusts.
- ✗If your investments grew 20%, your FIF income under CV could be much higher than under FDR.
When losses can be claimed / reduced to zero
- •If you are an individual using CV for ordinary shares where you could have used FDR instead, any calculated loss under CV is reduced to zero. You can't claim the loss against other income.
- •If you are using CV because the investment is a non-ordinary share where FDR was not allowed, IR461 says losses on disposal are taken into account in the formula and can be claimed.
FDR vs CV vs RAM: Which to Choose?
Note on RAM: If you are eligible for the Revenue Account Method, you need to decide whether RAM or the existing methods apply for the relevant investments. RAM has specific election rules and cannot simply be mixed into the ordinary FDR/CV comparison for the same eligible interests.
FDR vs CV Comparison Option
For individuals and eligible trustees (type B):
- •If you are eligible to use both FDR and CV for your investments (i.e., they are ordinary shares), you can calculate your total FIF income using both methods.
- •You can then choose to declare the lower of the two calculated total income amounts in your tax return.
- !Important: Even if the CV calculation results in a loss, the lowest amount you can declare using this comparison option is zero. You can't declare a loss this way.
- •This comparison option generally isn't available to companies or other types of investors.
Our FIF Calculator compares FDR and CV for common ordinary-share scenarios where that comparison is available.
Currency Conversion
All amounts used in your FIF calculations must be in New Zealand Dollars (NZD).
- •You need to convert any foreign currency amounts using an appropriate exchange rate.
- •IR461 says you may choose actual daily rates, a rolling 12-month average rate, or a rolling average for shorter or longer periods calculated using the mid-month rate, applied consistently to all attributing interests.
- •IRD accepts mid-month rates as equivalent to actual rates for transactions occurring in that month. IRD also publishes end-of-month, mid-month, and rolling average rates for selected currencies.
- !Our FIF Calculator uses external daily exchange-rate data as an estimate. It does not implement IRD's rolling-average or mid-month election methods, so verify the exchange rate method before filing.
Important: This is general guidance. FIF treatment depends on your own facts, so check Inland Revenue guidance or speak with a qualified tax professional before filing.