Revenue Account Method (RAM)

What is the Revenue Account Method?

The Revenue Account Method (RAM) is a FIF calculation method for eligible individuals and family trusts. Instead of taxing a deemed annual return, RAM generally taxes dividends and qualifying gains when they are received or realised.

• •Taxes qualifying gains on disposal (realisation basis)
• •Reduces gains and losses on disposal by 30% before applying your marginal tax rate
• •Taxes dividends in the year received (no discount)
• •Allows qualifying capital losses to offset RAM gains or dividends, subject to the RAM rules

Who Is Eligible?

Separate the enacted IR461 rules from the 2026–27 Bill proposal before choosing a method:

1. Current IR461: Ordinary RAM taxpayers

• •Individuals who became New Zealand tax residents (not transitional residents) on or after 1 April 2024
• •Must have been non-resident for at least 5 years before becoming a New Zealand tax resident
• •Family trusts where the principal settlor meets the above criteria

2. Current IR461: Extended RAM taxpayers

These are ordinary RAM taxpayers who are also:

• •Generally liable to tax in another country on disposal of those shares based on citizenship or a right to work there
• •Practically: This is especially relevant to US citizens and green card holders

3. 2026–27 Bill proposal from 1 April 2026

• •New Zealand-resident natural persons and eligible trustees could use RAM for qualifying unlisted foreign shares, irrespective of when they arrived in New Zealand.
• •New Zealand-resident natural persons and eligible trustees who face concurrent taxation overseas because of citizenship or a right to work there could use extended RAM for listed and unlisted foreign shares.
• •The proposal would apply from the 2026-27 tax year if enacted.

Which Investments Qualify?

Current IR461: Ordinary RAM taxpayers

RAM applies to qualifying "RAM interests". For ordinary RAM taxpayers, this commonly means shares in foreign companies that:

• •Were acquired before becoming a New Zealand tax resident, AND
• •Meet all of these criteria: not listed on a stock exchange; no redemption facility for market value; not an entity deriving 80%+ value from ineligible shares

It can also cover shares acquired while New Zealand resident if they resulted from arrangements entered into before becoming New Zealand resident.

Current IR461 and 2026–27 Bill: Extended RAM taxpayers

IR461 says extended RAM may let you apply RAM to all foreign shares, rather than only the ordinary qualifying RAM interests above. Depending on the facts, this can include shares regardless of:

• •When acquired (before or after NZ residency)
• •Nature of investment (listed/unlisted)

How RAM Works

Records

Keep acquisition, disposal, dividend, and valuation records. IR461 specifically requires market valuation information if a RAM interest is sold within 3 years after you leave New Zealand.

Important Considerations

Exit Tax

If you leave NZ, RAM interests are deemed sold at market value immediately before becoming non-resident. IRD guidance says that deemed disposal is disregarded for RAM interests not sold within 3 years of leaving, or by the time you become a New Zealand resident again if you return within 3 years.

Election Process

• •IR461 refers to RAM being elected but does not set out every election step on this summary page
• •The Bill would allow an eligible person to first opt into RAM at any time, then require RAM for five consecutive income years before opting out
• •After opting out, the Bill would require five consecutive income years outside RAM before opting back in
• •Check the legislation, IRD guidance, or a tax adviser before choosing RAM, because changing method can affect future years and trigger deemed-disposal consequences

Transitional and treaty non-resident periods

For the RAM time-apportionment calculation used when a value is not readily available and an independent valuation is not obtained, the Bill would exclude days when the person is a transitional resident or treated as non-resident under a double tax agreement from the FIF period.

De minimis threshold

The threshold can still be relevant before you choose a method. Current IR461 guidance uses NZ$50,000. The 2026–27 Bill proposes increasing it to NZ$100,000 from 1 April 2026, but that amount is not enacted.

RAM, FDR, and CV compared

What Should You Do Now?

If RAM may apply under current IR461 rules or the 2026–27 Bill proposal:

1. 1
   Track your investments:Keep records of all foreign investments, when you acquired them, and whether they are listed or unlisted.
2. 2
   Keep valuation records:IR461 requires market valuation information if a RAM interest is sold within 3 years after you leave New Zealand.
3. 3
   Check the election rules:RAM choices can affect future years and may have deemed-disposal consequences.
4. 4
   Separate proposal from law:For 2026-27 planning, note which outcome depends on the 2026–27 Bill being enacted.
5. 5
   Seek advice:Consider professional tax advice for your specific situation.