Before you wrestle with FDR or CV, there's one test that decides whether you need to deal with FIF tax at all: the de minimis threshold.
The rule in one sentence
If the total cost of all your attributing foreign shares stayed at or under NZ$50,000 at all times during the tax year, the FIF rules generally don't apply, and you simply return any actual dividends instead.
💡 Good to know: the test is on cost, not market value. It's what you paid for the shares (in NZD), not what they're worth now.
How the threshold is measured
A few details trip people up:
- It's measured across the whole year, not just at year-end. If your cost base went over $50k at any point, even briefly, you can fall outside the exemption.
- It's the combined cost of all your FIF holdings, not per-broker or per-share.
- Cost is generally in New Zealand dollars, converted at the time you acquired each parcel.
The traps
- A mid-year top-up that pushes your cumulative cost over $50k can pull you into the FIF rules for the whole year.
- The threshold applies per person, so a couple holding shares jointly should check how their share of the cost is counted.
- You can also elect into the FIF rules even under $50k, though most people won't want to.
What to do next
If you're confident you stayed under $50k all year, you likely don't need the FIF calculation: just return your dividends. If you went over, or you're not sure, work out your FIF income using the FDR and CV methods.
Key takeaways
- Stay under NZ$50,000 total cost all year and the FIF rules generally don't apply.
- The test is on cost in NZD, measured across the whole year, combined across holdings.
- A mid-year top-up over the line can catch you for the entire year.
This guide is general information, not tax advice. Always verify figures against IR461 and your year-end statements, and check anything important with a qualified NZ accountant before filing.