Overseas shares or an NZ PIE fund: the tax, side by side
The same money in the same overseas shares, held directly under the FIF rules at your tax rate, or through an NZ PIE fund at your PIR. Before fees. Change any assumption.
After tax. Tax paid $21,094 in total at your rate of 33%; the lower of FDR and CV each year.
After tax. Tax paid $18,110 in total at your PIR of 28%, on 5% of the value each year.
Year by year
| Year | Direct: method | Direct: income | Direct: tax | Direct: value | PIE: income | PIE: tax | PIE: value |
|---|---|---|---|---|---|---|---|
| 1 | FDR | $5,000 | $1,650 | $105,350 | $5,000 | $1,400 | $105,600 |
| 2 | FDR | $5,268 | $1,738 | $110,986 | $5,280 | $1,478 | $111,514 |
| 3 | FDR | $5,549 | $1,831 | $116,924 | $5,576 | $1,561 | $117,758 |
| 4 | FDR | $5,846 | $1,929 | $123,180 | $5,888 | $1,649 | $124,353 |
| 5 | FDR | $6,159 | $2,032 | $129,770 | $6,218 | $1,741 | $131,317 |
| 6 | FDR | $6,489 | $2,141 | $136,713 | $6,566 | $1,838 | $138,670 |
| 7 | FDR | $6,836 | $2,256 | $144,027 | $6,934 | $1,941 | $146,436 |
| 8 | FDR | $7,201 | $2,376 | $151,733 | $7,322 | $2,050 | $154,636 |
| 9 | FDR | $7,587 | $2,503 | $159,851 | $7,732 | $2,165 | $163,296 |
| 10 | FDR | $7,993 | $2,637 | $168,403 | $8,165 | $2,286 | $172,440 |
- Both hold the same overseas shares: $100,000 with dividends of 2% and price growth of 5% each year.
- Direct: we re-run the $50,000 test every year on cost: the amount invested plus reinvested dividends, less the average cost of shares sold to pay tax. In a year the cost is over $50,000 at any time, FIF income is the lower of FDR and CV, taxed at your rate of 33%; otherwise only dividends are taxed.
- PIE: the fund uses FDR (5% of the value) and pays tax at your PIR of 28%. Some funds use other methods.
- Tax is paid out of the investment each year and dividends are reinvested.
- No fees, no foreign withholding tax and no currency changes on either side. Fees and credits differ between funds and platforms.
These are figures, not a recommendation. Which suits you depends on fees, the funds, your other income and your plans. For personal advice, see a licensed financial adviser.
Worked example shown. Change any figure to see your own result (needs JavaScript).
Questions people ask
Is a PIE fund taxed less than holding shares directly?
It depends on your tax rate, your PIR, the returns, the fees and whether you are under $50,000. The tool shows both sets of figures; it does not choose for you.
Does a PIE fund count toward my $50,000?
No. NZ PIE funds are not FIF interests for you.
Calculators
Every FIF tool
Your FIF tax for the year
Holdings in, the $50,000 test, FDR and CV side by side, the lower allowed method, tax and your IR3 boxes.
Open →The $50,000 test
Cost, not market value, on any day of the year. Couples, joint holdings, trusts and the 4-year look-back.
Open →Fair dividend rate calculator
5% of your 1 April value plus the full quick sale adjustment, with last in, first out matching.
Open →Comparative value calculator
Closing value plus sales and dividends, less opening value and purchases, with the loss floor and the method choice.
Open →IRD exchange rates for FIF
Inland Revenue’s end-of-month, mid-month and rolling 12-month rates, with a converter.
Open →Under $50,000: dividend tax
Below the threshold your foreign dividends are ordinary income. Tax, foreign tax credit and IR3 boxes.
Open →Is this a FIF?
ASX shares, NZ PIE funds, employee shares, foreign super, crypto: in or out of the rules.
Open →New to New Zealand
Your transitional resident end date, and the revenue account method if you qualify.
Open →Is the threshold $100,000 yet?
No. Dated status of the lapsed bill, and the proposal on your own figures, marked NOT LAW.
Open →