The $50,000 FIF threshold: cost, any day, couples and trusts

The $50,000 threshold decides whether you deal with FIF at all. It is measured on cost, on any day of the income year, and it is a cliff: one day over and every foreign share you hold is in the rules for the whole year.

Cost, not market value

Inland Revenue’s guide puts it simply: individuals “do not need to apply the FIF rules if the total cost of their attributing interests is below $50,000 throughout the year” (IR461 p5). Cost is generally what you paid, including brokerage. A portfolio that cost $45,000 and is now worth $80,000 is still under the threshold.

Exactly $50,000 is inside the exemption: the Act says “more than $50,000” (s CQ 5(1)(d)).

Any day in the year, and the cliff

The test is whether your total cost was more than $50,000 “at any time in the year”. If it was, “all your attributing interests are subject to the FIF rules; the first $50,000 is not exempt” (IR461 p9).

Worked example. Your foreign shares cost $45,000 on 1 April 2025 and were worth $60,000. In February 2026 you buy another $10,000. Your cost is now $55,000, so the whole 2025/26 year is a FIF year. Under FDR your FIF income is 5% of the full 1 April value: $3,000. With $95,000 of other income, the extra tax is $990.00.

Couples, joint accounts and children

Each person has their own $50,000. Jointly held shares are split between the holders. In IRD’s example, two spouses each hold $20,000 alone and $60,000 together: each counts $20,000 plus $30,000, which is $50,000, so neither is over. If one of them held $40,000 alone, that person would count $70,000 and be in the rules; the other would not.

Children who hold shares in their own name have their own threshold (a platform source; it fits the “natural person” test).

Trusts and companies

Only natural persons and “type A” eligible trusts get the exemption. Type A trusts are narrow: an estate within 5 years of the death, some court-ordered or compensatory trusts, and trusts settled by ACC (IR461 p24). An ordinary family trust is not type A, so on our reading it has no $50,000 exemption, although it can choose comparative value in a poor year. Companies have no exemption.

Opting in, and the 4-year look-back

You can choose to apply the FIF rules while under the threshold, for example to use a CV loss year. But the Act then keeps you in: if any of your previous 4 returns included FIF income from interests that cost $50,000 or less all that year, the rules apply again (s CQ 5(1)(d)(iii)). A year in which you were over $50,000 and had to apply the rules does not count for the look-back.

It is not $100,000 yet

A bill introduced on 10 September 2026 would raise the threshold to $100,000 from 1 April 2026. It lapsed when Parliament dissolved before the election and is NOT LAW. See our dated status page.

Questions

Do NZ PIE funds count toward the $50,000?

No. They are not foreign companies, so they are not your FIF interests.

Does selling shares reset my cost?

It lowers your cost from the day of the sale, but a higher cost earlier in the year still counts. IRD has not said how to reduce cost on a part sale; we use average cost.