Moved to NZ with foreign shares? Transitional residence, then RAM

Become a New Zealand tax resident for the first time, or return after 10 or more years away, and most of your foreign investment income is tax-exempt for up to 48 months. FIF income is on the exempt list. When the exemption ends, the FIF rules start applying, with your shares generally treated as acquired at market value on that day. And for people who arrived from 1 April 2024 with unlisted foreign shares, there's now a third path: the Revenue Account Method (RAM), which waits for you to actually sell.

This guide covers the transitional window, the cliff at the end of it, and RAM, including the extended version that matters to US citizens.

Who counts as a transitional resident

You qualify automatically if you become a New Zealand tax resident and haven't been one at any point in the previous 10 years. That covers genuine new migrants and returning Kiwis alike. The exemption runs for up to 48 months from the end of the month you became tax resident, and you get it once in a lifetime. Leave, come back, and there's no second helping.

There's no application. If you meet the tests, you're a transitional resident unless you opt out.

What the exemption covers

While it lasts, most foreign-sourced passive income is exempt from New Zealand tax: foreign dividends, foreign interest, offshore rental income, and FIF income. Your overseas share portfolio can sit untouched by the FIF rules for the whole window, and there's no FIF income to calculate or return.

Two boundaries to respect:

• New Zealand income was never exempt. Salary earned here, NZ interest and dividends, and NZ rentals are taxed normally from day one.
• Foreign employment income isn't covered either. Keep doing remote work for an offshore employer and that income is taxable in New Zealand, exemption or not.

The Working for Families trade-off

You can't have the exemption and Working for Families tax credits at the same time. Applying for Working for Families ends the exemption early, permanently. IR461 flags this specifically, because it's an easy mistake for a new family to make in their first year: a few hundred dollars of tax credits can switch on FIF tax across an entire offshore portfolio. Do the sums on both sides before applying.

When the window closes

The day the exemption ends, you're an ordinary New Zealand tax resident with an offshore portfolio, and the FIF machinery starts. Three things to line up before that date:

• Your cost basis resets. In general, the end of an exemption produces a deemed disposal and re-acquisition at market value (IR461 notes this under its change-of-status rules). Practically, the market value of your holdings around that date, in NZD, is what feeds the $50,000 de minimis test going forward. A portfolio that cost $30,000 a decade ago but is worth $120,000 now starts its NZ life at $120,000, past the threshold from day one.
• Pick a method. From the first full year, FDR vs CV applies like it does for everyone else, and the choice is yearly.
• Records start mattering. Opening values, exchange rates and dividend statements from the transition date onward are what your first IR3 with FIF income will be built on. The filing guide covers what that return looks like.

💡 Good to know: the exemption end date is knowable in advance to the month. Diarise it. The worst version of this is discovering the FIF rules two years after they started applying, and IR461's penalty and default-assessment warnings apply to transitional residents like anyone else.

RAM: the realisation method for recent arrivals

From 1 April 2025 (the 2025/26 tax year), eligible new arrivals can use the Revenue Account Method for some pre-arrival shares, instead of FDR or CV. RAM is a different philosophy: no notional annual income at all. You're taxed when money actually moves.

How it works, per IR461:

• Dividends are taxed when received, at your marginal rate.
• Gains on disposal are reduced by 30%, then taxed at your marginal rate. Sell for a $10,000 gain and $7,000 of it is taxable income.
• Losses get the same 30% haircut, and can only offset dividends or gains from other RAM holdings, with any excess carried forward. They don't shelter your salary.

Eligibility is narrow. You must be a natural person who became a New Zealand resident (other than a transitional resident) on or after 1 April 2024, after at least five years as a non-resident. Family trusts qualify when the principal settlor meets the same tests. And the shares themselves must have been acquired before you became NZ tax resident, be unlisted on any exchange, have no market-value redemption facility, and not sit in an entity that's mostly a wrapper for shares that wouldn't qualify.

In plain terms: RAM is for the startup equity, private company stakes and employee shares you brought with you, not for the ETF portfolio you built after arriving. Listed shares and anything bought while living here stay under FDR and CV, which is the ground the calculator covers.

Extended RAM: the US citizen clause

One group gets a much wider version. If another country generally taxes you on share disposals because of your citizenship or a right to live and work there, you can apply RAM to all your foreign shares, listed ones included. That's aimed squarely at US citizens and green card holders, who face American capital gains tax on the same shares no matter where they live. Extended RAM lets them line the two systems up on a realisation basis instead of paying NZ tax on notional income and US tax on actual gains.

If that's you, this is genuinely worth specialist advice. It changes the shape of your whole NZ tax position, and electing it has consequences that outlast your time in the country, as the next section shows.

Leaving New Zealand with RAM interests

RAM follows you out the door. Leave New Zealand and you're deemed to have disposed of your RAM interests at market value just before you go. The deemed disposal is then disregarded if you don't sell within 3 years, or if you're back as a resident within 3 years. Sell within that window, though, and you must notify IRD (through myIR, by the normal filing date for the year of sale) with the details and the market valuation at your departure date. IR461 calls this deferred realisation tax. The short version: electing RAM isn't something you shed at the airport.

One more thing on the horizon

Budget 2026 proposed opening RAM up to all New Zealand residents for unlisted foreign shares from the 2026/27 year, not just recent arrivals. Like the proposed $100,000 de minimis threshold, it isn't law yet. Everything above describes the rules as enacted.

In short

• New and 10-year-returning residents get up to 48 months with no FIF tax on foreign shares, automatically, once per lifetime.
• Applying for Working for Families ends the exemption early. Choose deliberately.
• When it ends, holdings are generally treated as acquired at market value, which is what the $50,000 test then measures.
• RAM (from 2025/26) taxes recent arrivals' pre-arrival unlisted shares on sale: dividends as received, 70% of gains.
• US citizens and green card holders may use extended RAM across all their foreign shares.
• Leaving NZ within the rules' reach triggers deemed-disposal obligations for up to 3 years.

Common questions

Do I pay FIF tax in my first four years in New Zealand?

Usually not. Transitional residents are exempt from tax on most foreign passive income, FIF income included, for up to 48 months from the end of the month they became resident. NZ-sourced income and foreign employment income are still taxable.

What ends the transitional exemption early?

Applying for Working for Families tax credits, or opting out. It also simply expires at the end of the 48-month window, and it can't be used a second time after a later return to New Zealand.

What happens to the $50,000 threshold when my exemption ends?

Your holdings are generally treated as disposed of and re-acquired at market value when your status changes, so the de minimis test runs on what the portfolio is worth then, not what you originally paid overseas. Many arriving portfolios are over the threshold from their first FIF year.

What is the Revenue Account Method (RAM)?

A FIF method available from the 2025/26 year for people who became NZ resident on or after 1 April 2024 after five-plus years away. It applies to unlisted foreign shares acquired before arrival, taxing dividends as received and 70% of gains on sale, instead of a notional annual figure.

I'm a US citizen. Can RAM cover my listed US shares?

Potentially, yes. Extended RAM is available where your citizenship (or a right to live and work in another country) means that country taxes your share disposals anyway, and it can then apply to all your foreign shares, listed included. It comes with departure-tax strings, so take advice before electing it.

Sources: IRD's temporary tax exemption page, and IR461: the revenue account method and deferred realisation tax pp.17-18, transitional resident and change-of-status notes pp.4 and 22. RAM is s EX 56B of the Income Tax Act 2007.