Sharesies & Hatch Under $50k NZ 2025-26 — FIF De Minimis Rules & Reporting (IRD)

New Zealand’s Foreign Investment Fund (FIF) regime is the tax system most Kiwi investors will brush against without realising. Every Sharesies-US, Hatch, Stake, or IBKR account holds “attributing interests in a FIF” — and once your cost base across all foreign holdings crosses NZD $50,000, the complicated rules kick in. Under it, you just pay tax on dividends. This guide covers the 2025-26 tax year and how the rules apply in 2026-27.

Working with a multi-platform portfolio? Our FIF tax calculator handles both FDR and CV comparisons, and the ASX FIF exemption checker flags which of your Australian holdings are FIF vs exempt.

The $50,000 De Minimis — What It Actually Means

Section CQ 5 of the Income Tax Act gives an exemption: individuals (and certain family trusts) whose total cost of attributing interests in FIFs stayed at or below NZD $50,000 throughout the year don’t need to apply the FIF rules. Instead they simply declare dividends received, similar to NZ shares.

Three critical details:

1. Cost, not market value — you compare original NZD cost (including brokerage) against $50,000, not the current portfolio value. A portfolio that grew from $45k cost to $90k market value is still below threshold.
2. All FIF interests combined — across every platform, broker, and direct holding. The threshold is a personal aggregate.
3. Peak-day test — the rules apply if cost exceeded $50k at any point in the year, not just at 31 March. Buying $55k of US ETFs on 29 March and selling them on 2 April still triggers FIF for the whole year.

If the de minimis applies, your filing is very simple:

• Declare any dividends received (grossed up for any foreign withholding tax)
• Claim foreign tax credit for withholding tax already paid (capped at NZ tax otherwise payable on that income)
• No FDR calculation, no CV calculation, no quarterly peak values, no attribution

If it doesn’t apply, every foreign holding must go through FIF — even the ones you’ve only held a week.

What Counts Toward the $50,000

Holding type	Counts?
NZX-listed shares (Air NZ, F&P Healthcare, Spark)	No
Sharesies NZ portfolio	No
ASX-listed shares on IRD’s approved list	No
ASX-listed ETFs (VAS, VGS, etc.)	Yes (they’re unit trusts)
US shares on Sharesies US, Hatch, Stake	Yes
US ETFs (VOO, QQQ, SPY, etc.)	Yes
UK, European, Japanese, emerging markets shares	Yes
ADRs and GDRs	Yes
Foreign employee share scheme (vested)	Yes
Foreign bank term deposits (typically)	Generally no — these fall under financial arrangements rules
Cryptocurrency	No — separate regime

The ASX exemption is narrower than people assume. Direct holdings in resident Australian companies on IRD’s approved list are exempt. Indirect holdings via Australian-domiciled ETFs or listed investment companies generally are not — they’re FIFs because of the fund / trust wrapper. Verify specific tickers before assuming exemption.

The FDR Method (Default)

Once your foreign cost crosses $50k, the default is Fair Dividend Rate (FDR):

Taxable FIF income = 5% × opening market value (1 April)

Where the opening market value uses NZD, converted using RBNZ mid-month rates or actual transaction rates. For new purchases during the year you use a quick-sale adjustment that includes any realised gains from shares bought and sold within the same year.

FDR advantages:

• Predictable — you know in April what your tax bill will be
• Ignores actual return — a year of heavy market losses still produces 5% FDR income
• Simple once set up

FDR disadvantages:

• You pay tax in bad years with actual losses
• Capital gains on top of dividends aren’t separately taxed (bonus) but they also don’t shield you in loss years

The CV Method (Election Each Year)

Comparative Value (CV) is the alternative for individuals and eligible trusts:

Taxable FIF income = (closing market value + distributions + sale proceeds)
                   - (opening market value + purchases)

Essentially actual gain over the year, measured in NZD. If this is less than what FDR would produce — including if it’s zero or negative — you can elect CV for that year.

CV advantages:

• Zero tax in loss years
• Tracks reality for volatile portfolios

CV disadvantages:

• Must be applied consistently across all your FIF holdings that year (no cherry-picking)
• Requires marking-to-market every holding on 1 April and 31 March (in NZD)
• You pay tax on full gain in good years, potentially more than FDR

The choice is made each year in your IR3. Many Sharesies / Hatch investors effectively use FDR in up-years and CV in down-years.

Worked Example — Multi-Platform Investor Crosses Threshold

Hemi’s portfolio at 1 April 2025:

Platform	Holdings	Cost (NZD)
Sharesies NZ	Auckland Airport, Mainfreight	$18,000 (not FIF)
Sharesies US	VOO, VTI ETFs	$22,000
Hatch	AAPL, MSFT, GOOGL	$31,000
Direct IBKR	Tencent ADR	$4,500
Employee share scheme	Vested US parent-company shares	$8,000
Total foreign (FIF) cost		$65,500

Hemi exceeds the $50,000 de minimis because his combined foreign cost across all platforms is $65,500. FIF rules apply.

Under FDR for 2025-26:

• Opening market value of FIF holdings at 1 April 2025: $78,000
• FDR income: 5% × $78,000 = $3,900
• At Hemi’s 33% marginal rate: ~$1,287 tax

His actual portfolio grew 15% (market value $89,700 at 31 March 2026). Under CV:

• CV income: ($89,700 + dividends $900) - ($78,000 + new purchases $5,000) = $7,600
• At 33%: ~$2,508 tax

FDR is lower this year — Hemi stays on FDR. If the portfolio had fallen to $65,000 at year-end, CV would be -$7,100 (taxable at zero — CV can’t go below zero) and FDR would still tax him $1,287. He’d elect CV.

The Most Common Mistake

The single biggest trap investors fall into: thinking de minimis is per-platform. Sharesies often show US and NZ portfolios separately with its own dashboard, so investors see “$30k US portfolio” and assume they’re safe. They forget Hatch, Stake, employee share schemes, or direct brokerage add up.

Always total foreign cost across every foreign holding globally, at the highest point during the year, before concluding you’re under the de minimis.

Second most common mistake: ignoring the peak-day test. A lumpy year where you briefly held $60k of foreign shares for a week still puts you in the FIF regime for the whole year.

Reporting Foreign Income on IR3

Whether you’re under de minimis or over, foreign investment income goes on the IR3:

• Under de minimis: dividends section, grossed up for foreign withholding tax, with foreign tax credit claimed
• Over de minimis, FDR: FIF income section, using Method 1 (FDR) with 5% of opening market value
• Over de minimis, CV: FIF income section, using Method 2 (CV)

You cannot claim foreign withholding tax paid on dividends as a foreign tax credit against FDR income — it’s a feature of the regime that withholding on dividends received is effectively lost if FDR is being used (though some CV users can utilise it). This is a real cost to FDR in dividend-heavy portfolios like US REITs.

Cost Basis Across Multiple Platforms

Because cost matters, every foreign purchase needs:

• Trade date
• Foreign currency amount
• NZD cost including brokerage (use transaction-date exchange rate or IRD mid-month)
• Platform and cost in NZD

Keep this for 7 years. Sharesies and Hatch export CSV trade histories; reconcile annually at 1 April.

When disposing of part of a holding, use the weighted-average cost method — not FIFO or LIFO as some US brokerage reports default to.

Useful Calculators

• FIF tax calculator — FDR vs CV comparison across multiple holdings
• Investment tax decision tool — FIF vs bright-line vs PIE classification
• Dividend tax calculator — RWT, imputation, franking, foreign withholding
• PIE vs direct investment calculator — if PIR-capped PIE funds suit better
• IR3 filing checker — confirm you need to file

Sources

• FIF rules and methods — IRD
• When FIF rules apply — IRD
• Australian share exemption list — IRD
• Fair Dividend Rate (FDR) method — IRD
• Comparative Value method — IRD