How to file FIF income in your IR3, step by step

FIF income goes in the overseas income section of your IR3: the income itself in box 17B, and the foreign tax you're claiming as a credit in box 17A. Since the 2023 tax year, individuals also file an overseas income summary (IR1261) with the return, and if more than one FIF sits behind your box 17B figure, IRD expects workings that break it down per fund. Most individual investors don't need the separate FIF disclosure at all; an annual exemption covers them. That's the whole picture. The rest of this guide walks through each piece in filing order.

It assumes you already have your FIF income figure. If you don't, start with what FIF tax is and FDR vs CV, or let the calculator work the numbers out from your broker CSVs.

💡 Good to know: if you normally get an automatic income tax assessment from IRD, having FIF income changes that. Overseas income isn't something IRD can see from payday reporting, so you need to file an IR3 yourself.

What you need before you start

Everything in NZ dollars:

• Your FIF income figure for the year, worked out under FDR or CV, whichever you're entitled to and have picked.
• The foreign tax withheld on your dividends during the year. For US shares that's usually the 15% treaty rate showing on your broker statements.
• A per-fund breakdown of both numbers, if you hold more than one FIF. More on this below, because it isn't optional.
• Each fund's name, country and market value (opening value for FDR, closing for CV), in case you're one of the people who does need to file a disclosure.

The calculator's verdict screen gives you the first two (the exact figures for boxes 17B and 17A), and the IR3-ready export breaks them down per holding for the third.

💡 Under the $50,000 threshold? Then there's no FIF income to file at all. You declare the dividends you actually received in the same overseas income section, and the de minimis guide covers how the threshold works.

Where FIF income goes in the IR3

The IR3 asks whether you received overseas income. Answer yes, then fill in:

• Box 17B (total overseas income). Your FIF income for the year, plus any other overseas income you had: foreign interest, a foreign pension, dividends from exempt Australian shares.
• Box 17A (total overseas tax paid). The foreign tax credits you're claiming, usually the withholding tax on your dividends, subject to the caps covered below.

Two mistakes to avoid here. First, FIF income doesn't belong in the dividends question, which is for New Zealand dividends. Everything about your overseas shares lives in the overseas income section. Second, don't declare dividends from FIF shares on top of the FIF income. Under FDR the 5% figure stands in for your whole return, and under CV the dividends are already inside the calculation. Adding them again means paying tax on them twice.

The overseas income summary (IR1261)

From the 2023 tax year onwards, individuals with overseas income must file an overseas income summary (IR1261) alongside the return. IR461 is explicit that this applies even when the disclosure exemption covers you.

It's a short schedule, not a second tax return: your overseas income by type and by country, with the tax credits claimed against each. For FIF income specifically, IRD gives you a choice. Break it down by country, or report the whole lot under a single "overseas" jurisdiction. You can complete the IR1261 inside myIR while filing the return, through tax software, or on the downloadable form.

The per-FIF breakdown

This is the part of the official guidance people miss, and it's worth quoting IRD directly:

"If income from more than 1 FIF is included in an amount, you must supply a supporting report, or workings with a breakdown of the income and tax credit amount per FIF."

So if your box 17B figure combines Apple, an S&P 500 ETF and a Tesla holding, the single number isn't enough: the return needs workings showing the income and credit for each fund. IRD accepts reports from your adviser or software. Label the document clearly, and send it either as an attachment to the return or as a web message in myIR.

Keep the underlying records too: which method you used, the market values you started from, and the exchange rates you converted at. IRD can ask for them well after filing.

Do you need a FIF disclosure too?

On paper, anyone holding an attributing FIF interest may have to make a disclosure in their return. In practice, IRD publishes an International Tax Disclosure Exemption every April, and it usually exempts you when either:

• the $50,000 de minimis exemption applies to you, or
• you hold less than 10% of the fund, you use FDR or CV, and the fund is incorporated or tax resident in a country New Zealand has a double tax agreement with.

That second bullet describes the typical Hatch, Sharesies, IBKR or Tiger portfolio: small stakes in US-listed companies and ETFs, with the US comfortably on the DTA list. Most individual investors therefore skip the disclosure entirely. The income is a different story, and IR461 puts it plainly: "The notice does not exempt persons from declaring FIF income if it arises." The IR1261 summary above is required either way.

If you do need to disclose (a fund in a non-DTA country is the common trigger), it happens inside the return rather than on a separate form. In myIR, the return has a disclosures section where you select "This return will include CFC/FIF disclosure", then enter each fund: its name, the country it's incorporated or tax resident in, the calculation method, and the market value in NZD. If you hold many funds, IRD provides a CFC/FIF spreadsheet template you can fill in and upload instead, one row per fund.

Claiming the foreign tax credit

Box 17A isn't simply "everything my broker withheld". The foreign tax credit guide works through this with numbers; the short version is that the credit is capped three ways:

• The treaty rate. You can only credit what the DTA allows. IR461's example: Switzerland withholds 30% on a dividend, but the treaty limits Swiss tax to 15%, so 15% is the most you can claim from IRD. The over-withheld balance is a refund claim against the Swiss tax authority, not New Zealand's.
• The NZ tax on that income. The credit can't exceed the New Zealand tax payable on the foreign income it relates to (subpart LJ of the Act). In a year where CV puts your FIF income at or near zero, the usable credit shrinks to match.
• No refunds, no carry-forward. Credits you can't use this year are gone. They don't come back as a refund and don't roll into next year.

One Australian wrinkle: franking (imputation) credits attached to Australian dividends aren't foreign tax credits and can't go in box 17A. New Zealand imputation credits attached by trans-Tasman companies have their own treatment, and any Australian resident withholding tax is claimable, with the excess refundable. That corner is specialist territory worth checking against IR461 if it applies to you.

The calculator handles the middle cap for you: it applies the per-holding credit limit when working out net tax payable, so the box 17A figure it shows is already the claimable amount, not just the sum of what was withheld.

Dates, payment and what happens if you don't

• The tax year ends 31 March. Your IR3 is due 7 July, unless a tax agent's extension of time pushes it out (as far as 31 March the following year).
• Any tax owing for the year, the terminal tax, is generally due 7 February the following year, or 7 April if you're with an agent.
• If your residual income tax lands over $5,000, you become a provisional taxpayer for the next year, paying in instalments rather than one bill. The provisional tax guide covers the dates, the safe harbour and when to estimate.

On the enforcement side, IR461 doesn't leave much doubt: there are penalties both for not declaring FIF income and for skipping a required disclosure, and IRD can issue default assessments. It also cross-checks financial account information exchanged with other countries against filed returns, which is how undeclared broker accounts surface. If you realise you've missed a year, a voluntary disclosure made before an audit begins can reduce shortfall penalties by up to 100%. That's a much cheaper conversation than the one that starts with a letter from IRD.

In short

• FIF income goes in box 17B; the foreign tax credit you're claiming goes in box 17A.
• File the IR1261 overseas income summary with the return. It's required from the 2023 tax year on, exemption or not.
• More than one FIF behind the figure? Attach labelled per-fund workings to the return.
• The separate FIF disclosure is usually exempt for individuals using FDR or CV on sub-10% stakes in DTA-country funds.
• Don't declare dividends from FIF shares separately: FDR and CV already account for them.
• Due 7 July, unless a tax agent's extension applies.

Common questions

Which box does FIF income go in on the IR3?

Box 17B, "total overseas income", together with any other overseas income you received. The foreign tax you're claiming as a credit goes in box 17A. FIF income never goes in the dividends question, which is for New Zealand dividends.

Do I need to file a separate FIF disclosure (IR458)?

Usually not. IRD's annual International Tax Disclosure Exemption generally covers individuals who hold less than 10% of a fund, use FDR or CV, and hold funds in countries with a New Zealand double tax agreement, which describes most broker portfolios. You still have to declare the income and file the IR1261 overseas income summary.

What is the IR1261 overseas income summary?

A schedule individuals file with the IR3 from the 2023 tax year onwards, listing overseas income by type and country and the tax credits claimed against each. FIF income can be broken down by country or reported under a single "overseas" line. It's required even in years where the disclosure exemption applies.

Do I have to attach my FDR or CV workings?

If more than one FIF is combined into the amount you're returning, yes. IRD requires a supporting report or workings with the income and tax credit per FIF, attached to the return or sent as a myIR web message. With a single FIF there's nothing to break down, but keep your records: method, market values and exchange rates.

When is the IR3 due?

7 July following the 31 March end of the tax year, unless you have an extension of time through a tax agent. Terminal tax is due the following 7 February (7 April with an agent), and residual income tax over $5,000 makes you a provisional taxpayer for the next year.

Sources: the IR461 guide (foreign tax credits p.20, making a disclosure p.21), IRD's Reporting your overseas income and File a foreign investment fund disclosure pages, and the Income Tax Act 2007: foreign tax credits in subpart LJ, the FIF rules in subpart EX.