Foreign Investment Funds
Professional Tax Advice for Offshore Investments
and New Zealand FIF Compliance
Understanding Foreign Investment Fund Obligations in New Zealand
Expert Chartered Accountants Helping You Stay Compliant with IRD Requirements
Offshore Investments
Specialist tax advice and reporting support for offshore investments and Foreign Investment Funds (FIF) under New Zealand’s tax rules.
A foreign investment fund (FIF) is an offshore investment held in a foreign company, foreign unit trust, foreign superannuation scheme, or a foreign life insurance policy. If you or your trust have more than NZD 50,000 in offshore investments, the FIF rules administered by Inland Revenue (IRD) apply. These rules are designed to ensure that overseas income is correctly reported and taxed in New Zealand.
Working out your FIF income can be complex because each investment type has different valuation and reporting requirements. Factors such as market value, currency exchange, and the timing of transactions must all be considered. The team at Long + Cowan Chartered Accountants provides specialist tax advice to ensure your disclosures meet all IRD standards and that any foreign tax credits are correctly applied to avoid double taxation.
We help you gather the necessary data, including purchase costs, share prices, dividends, and exchange rates, and ensure all information is translated into New Zealand dollars where required. This process allows us to prepare accurate calculations and maintain full compliance with Internal Revenue expectations.
Whether you hold overseas shares, investment funds, or life insurance policies, our accountants can explain how these assets affect your New Zealand tax obligations. We assess your situation, determine whether FIF rules apply, and calculate the taxable income using the method most suitable for your circumstances. With expert guidance and detailed reporting, you can have complete confidence that your international portfolio is managed correctly and efficiently.
Foreign Investment Fund Reporting and Foreign Tax Credits
Detailed Foreign Investment Fund calculation, compliance, and advisory services for FIF reporting and foreign tax credit claims in New Zealand.
At Long + Cowan Chartered Accountants, we take the uncertainty out of Foreign Investment Funds (FIF) reporting. Our accountants determine which calculation method best fits your investment profile and ensure your income is declared accurately. Under New Zealand tax law, there are several methods to calculate FIF income, but the two main options are the Fair Dividend Rate (FDR) method and the Comparative Value (CV) method.
Fair Dividend Rate (FDR) Method
The FDR method assumes a notional 5 percent annual return on the opening market value of your FIF investments. This means you are taxed on a deemed return rather than the actual income received. The FDR approach simplifies taxation for investors with diversified portfolios and avoids the need to track every transaction individually. However, it cannot be used if you hold certain types of debt investments or if you elect another method under IRD rules.
Comparative Value (CV) Method
The CV method calculates your FIF income by comparing the end-of-year and beginning-of-year values of your investment, adjusted for any purchases, sales, or distributions during the period. The difference between these two values represents your taxable or deductible amount. This approach can be more accurate for actively traded investments but requires detailed records of all transactions, dividends, and currency movements.
Our accountants will select the calculation method that best reflects your investment type, ensures accuracy, and complies with IRD requirements. We use market data, share prices, and exchange rates to produce complete reports and keep your offshore portfolio transparent for Internal Revenue assessment.
We also handle the application of foreign tax credits, ensuring that tax already paid on overseas income is correctly offset against your New Zealand liability. This process prevents double taxation and ensures fair treatment across jurisdictions.
Long + Cowan Chartered Accountants provide ongoing support with record-keeping, annual filing, and updates when your investment portfolio changes. Whether you are new to offshore investing or have held overseas assets for years, our Wellington-based Chartered Accountants ensure your foreign investment fund reporting remains accurate, compliant, and fully aligned with your overall tax planning and financial strategy.