The revenue account method (RAM) for new residents: who can use it

The revenue account method (RAM) is the newest of the six FIF methods. Instead of tax on a deemed 5% return each year, it taxes dividends when received and 70% of gains when you sell, at your marginal rate (IR461 pp12 and 17). It became law on 30 March 2026, backdated to 1 April 2025. Eligibility is narrow, and several details still need confirming, which we mark below.

What RAM is, in one paragraph

IR461 lists six ways to work out FIF income: fair dividend rate, comparative value, cost method, deemed rate of return, RAM and attributable FIF income (IR461 p10). The first four tax an amount each year whether or not you sell. RAM taxes on a realisation basis: "RAM taxes dividends derived and gains on disposal from qualifying FIF interests on a realisation basis" (IR461 p17). Gains and losses on disposal "are reduced by 30% before being taxed at your marginal rate" (IR461 p17).

It was enacted by the Taxation (Annual Rates for 2025-26, Compliance Simplification, and Remedial Measures) Act 2026 on 30 March 2026, with effect from 1 April 2025 (Income Tax Act s EX 44 amendment notes; IRD bill commentary, September 2026, p44). Inland Revenue's March 2025 fact sheet shows the problem it solves. Its example, Bart, holds US start-up shares worth $2,000,000 on 1 April 2026; on the cost method that is $100,000 of FIF income a year and $39,000 of tax at 39%, with no sale and no cash from the shares.

Do not confuse RAM with holding shares "on revenue account" in the ordinary sense. IR461's glossary uses that phrase for someone who trades regularly or buys to make a profit; that is a different test, relevant mainly below the $50,000 threshold.

Who can use it from 1 April 2025

IR461 p17 sets out the current rules:

Examples using our eligibility function. Someone who became resident on 1 February 2025 after 8 years away, holding unlisted shares bought before arriving: eligible. The same person arriving on 1 June 2023: not eligible, because the arrival is before 1 April 2024. A US citizen arriving on 1 February 2025 after 8 years away with listed US shares: eligible for extended RAM.

Points that need confirmation.

• Transitional residents. IR461 says "(not transitional)". Most people away for 10 years or more arrive as transitional residents and are outside FIF for about 4 years anyway. Whether they can use RAM once that window ends is not spelt out in IR461. Confirm with IRD or your accountant.
• How you elect. IR461 says a person "elects to apply the RAM" (p11) but does not describe the mechanics in the return. Ask IRD or your tax agent how to show the election.
• Mixing methods. IR461 does not say in detail how RAM sits beside FDR or CV for your other shares in the same year. Our reading is that RAM applies to the qualifying interests and your other attributing interests use another method, but get this confirmed.

How the calculation works

The IR461 summary formula is: (0.7 x gains or losses on disposal) taxed at your marginal rate, plus dividends derived taxed at your marginal rate (IR461 p11).

• Dividends are income in full when derived.
• Gains on disposal are sale proceeds less cost, and 70% of the net figure is income.
• Losses are also counted at 70%. They "may only offset dividends or gains from other RAM-applied FIF interests, with excess losses carried forward" (IR461 p17). They cannot reduce your salary or other income.
• No yearly deemed income while you simply hold the shares.

Worked example. Aroha returned to New Zealand on 1 February 2025 after 8 years in London. Before returning she bought unlisted shares in a UK start-up for $100,000. In 2026/27 she receives $2,000 of dividends and sells all the shares for $150,000.

For contrast: if the same shares were on the cost method with an opening value of $100,000, she would have FIF income of $5,000 a year while holding them, sale or no sale. RAM moves the tax to the year of sale and taxes 70% of the real gain instead.

Loss example. Suppose instead she had sold for $60,000 shares that cost $80,000, with $1,000 of dividends. 70% of the $20,000 loss is $14,000; less the $1,000 of dividends gives a $13,000 RAM loss to carry forward, and no RAM income. The next year she sells other RAM shares that cost $60,000 for $90,000 and gets $1,000 of dividends: $21,000 plus $1,000 is $22,000, less the $13,000 brought forward, so $9,000 is taxable.

Our engine applies these steps. It also has an optional split of a gain by days owned while resident, which is our assumption about the enacted rules and is not used in these examples.

If you leave New Zealand: the deferred realisation tax

If you use RAM and later become non-resident, "you are deemed to have disposed of all RAM interests for market value immediately before you become non-resident" (IR461 p18). That deemed sale is disregarded for RAM interests you do not sell within 3 years of leaving, or before you come back within those 3 years.

If you do sell within 3 years, you must tell IRD the details of the interests, the sale date, and the market value on the day you became non-resident. You can do that in myIR, by the normal filing date for the year of the sale (IR461 p18). So a market valuation on the day you leave is a record worth keeping; see our record-keeping guide.

Proposed changes (NOT LAW)

The bill introduced on 10 September 2026 would have widened RAM. It lapsed when Parliament dissolved and is NOT LAW. As drafted it would have:

• opened RAM to all natural persons and eligible trustees for unlisted foreign shares, whatever their arrival date, from 1 April 2026 (IRD bill commentary pp44 to 46);
• dropped the 1 April 2024 arrival test for extended RAM;
• added a 5-year consistency rule for moving in and out of RAM;
• apportioned RAM gains to exclude transitional resident days. IRD's example, Ibrahim, has a $100,000 gain over 5,250 days of ownership, 789 of them in the FIF period: $100,000 / 5,250 x 789 x 0.7 = $10,520 (commentary p47; our engine matches).

Whether any of this returns depends on the next Parliament reinstating the bill. Our proposal guide tracks its status.

Is RAM worth looking at for you?

We do not recommend methods, but these facts help you decide whether to ask an adviser:

• If you hold listed shares and are not citizenship-taxed elsewhere, standard RAM does not apply to them; FDR or CV will.
• If you hold unlisted shares bought before arriving, RAM avoids yearly tax on value you cannot sell, at the cost of 70% of the gain being taxed on sale.
• If you are a US citizen, extended RAM can cover all your foreign shares, which may line up better with US tax on sale. Get cross-border advice.

Our new migrants tool runs the eligibility questions and the RAM sum. This is general information, not tax advice; check with your accountant. Rules checked 12 November 2026.

Questions

Is RAM only for people who arrived after 1 April 2024?

Under current law, yes: IR461 p17 requires residence (not transitional) on or after 1 April 2024 after at least 5 years away. The lapsed bill would have removed the date for unlisted shares; it is NOT LAW.

Can I use RAM for my Apple or Vanguard holdings?

Only under extended RAM, which is for people taxed on disposal in another country because of citizenship or a right to live and work there, such as US citizens. Standard RAM covers unlisted shares only.

Can a RAM loss reduce my salary tax?

No. RAM losses only offset RAM dividends and gains, and the excess is carried forward (IR461 pp17 and 19).

Does RAM count towards the $50,000 threshold?

RAM is one of the methods used once the FIF rules apply, so the shares are still FIF interests. IR461 does not discuss the threshold for RAM interests separately; confirm with your accountant.