US 401(k) and IRA accounts in NZ: FIF or foreign super?

There is no Inland Revenue ruling on 401(k) plans or Roth IRAs by name, and advisers do not all agree. What we can do is set out the two sets of rules that could apply, the facts that decide between them, and what each would mean in dollars. If you hold one of these accounts, this is a question for a cross-border tax adviser; this guide helps you ask it well.

Two sets of rules, and why it matters

A FIF includes "a foreign superannuation scheme" as well as a foreign company (IR461 p4). But since 1 April 2014 most foreign super is taxed under separate foreign superannuation scheme rules, not the FIF rules (IR461 p5 and p22 note 9).

So two questions decide your position. First, is the account a "foreign superannuation scheme" at all? Second, when did you acquire your interest in it?

Is a 401(k) or IRA a foreign superannuation scheme?

IR461 defines a foreign superannuation scheme as "a superannuation scheme created outside New Zealand to provide retirement benefits to natural persons" and says it may be "a trust, a unit trust, a company, or a statutory scheme" (IR461 p24). IR1024 gives "United Kingdom pension schemes" as an example and says the term does not include "schemes set up under another country's social security legislation".

On IRAs, the only IRD statement we found is in its article on the 2014 foreign superannuation changes. It says IRAs "are established mainly for the purpose of providing retirement benefits" and are "likely to be 'foreign superannuation schemes' for New Zealand tax purposes". Note the word likely. The article does not mention 401(k) plans or Roth IRAs.

You will see some sites say a 401(k) is "exempt under the treaty". That is contested, and we have not found IRD support for it. We do not rule either way.

When you joined decides a lot

Joined before you were NZ resident. If the account is foreign super, an interest acquired while non-resident is not a FIF superannuation interest, so the foreign super rules apply: tax on withdrawal or transfer, with the 4-year exemption first (IR461 p5; IR1024).

Acquired while NZ resident. IR1024 is direct: "If the investment was acquired while you were a New Zealand tax resident, it is taxed under the FIF rules." IR461 p5 says the same through its definition of a FIF superannuation interest. If you open an IRA after moving here, the FIF rules are the starting point.

Still contributing after arriving. If you keep contributing to a plan you joined before arriving, we have not found IRD guidance on whether the new contributions are a separate interest acquired while resident. Ask your adviser.

Grandparenting. If you returned the interest as a FIF in a tax return filed before 20 May 2013, you may stay in the FIF rules, but only if you keep treating it as a FIF in every later return (IR461 p5; IRD 2014 article).

Low-value interests. If your total FIF cost is under $50,000 and you do not opt in, a FIF superannuation interest is taxed under the foreign super rules instead (IR461 p5). For valuing super under FIF, IR461 lets you use total cost where actual value is not practical and there are no material gains (IR461 p13).

Transitional residents. While you are a transitional resident, foreign investment income is generally exempt, and section EX 41 exempts rights a person acquired while non-resident or transitional, for as long as they remain non-resident or transitional (IR461 p7).

Worked example: the same account under each set of rules

Start with IR1024's own example. Steve became resident on 21 February 2006, so his 4-year exemption ended on 28 February 2010, in the 2010 income year. He withdrew $25,000 on 12 August 2018, in the 2019 income year. 2019 less 2010 is 9, and the year 9 percentage in IR1024 is 40.26%: 40.26% of $25,000 is $10,065, which our arithmetic matches.

Now take Jordan, with the same dates, no contributions after arriving, and a $150,000 lump sum from a US account. Here is the result if the account counts as foreign super, and the result if it were a FIF interest instead, using our engine and 2026/27 tax rates for illustration:

Neither is "better" in general. The schedule percentage rises with each year of residence, to 100% from year 26 (IR1024), while FDR taxes every year. Which rules apply is not a choice you get to make for tax reasons; it follows from what the account is and when you acquired it.

The formula method, which taxes actual gains instead of a schedule percentage, is open only for defined contribution schemes and IRD recommends professional advice to use it (IR1024; IRD foreign superannuation page). Our UK pensions guide covers both methods and the 28% scheme pays option in more detail.

The US side, and US citizens

We cover New Zealand tax only. US tax on withdrawals, early withdrawal penalties and US reporting are separate questions. A double tax agreement can affect how much New Zealand taxes a lump sum and whether you get a foreign tax credit (IR1024; IRD foreign superannuation page). Periodic pensions are generally taxable in New Zealand in full when received (IR1024; IR461 p22 note 10).

US citizens living here face both systems at once. For ordinary shares, NZ law now has one tool aimed at them: extended RAM, which lets people taxed elsewhere on citizenship use the revenue account method for all their foreign shares if they became resident from 1 April 2024 after 5 years away (IR461 p17). It applies to shares, not to retirement accounts.

What to take to your adviser

• Plan documents for each account: type (401(k), traditional IRA, Roth IRA), who set it up, and whether it is defined contribution.
• The date you joined, and the date you became NZ tax resident (see our new migrants tool for the 4-year window).
• Statements showing contributions and values at the end of your exemption period and on each 1 April since.
• Any past NZ returns where you treated the account as a FIF.
• For brokerage accounts alongside, the cost of every holding, so you can test the $50,000 threshold.

Our is it a FIF? checker flags foreign super for adviser review rather than giving an answer, for the reasons above. This is general information, not tax advice; check with your accountant. Rules checked 12 November 2026.

Questions

Has IRD said a 401(k) is not a FIF?

Not that we have found. IRD has said IRAs are "likely" foreign superannuation schemes; it has not named 401(k) plans or Roth IRAs.

Do I pay NZ tax on a 401(k) every year?

If it is a foreign super interest you acquired while non-resident, generally no: tax arises on a lump sum withdrawal or transfer. If it is a FIF interest, yes, under a FIF method. Which applies depends on the facts in this guide.

Is a withdrawal in my first 4 years in NZ taxed here?

Lump sums received in the first four years of residence are generally exempt under the foreign super rules (IR1024), if the account counts as foreign super.

Does the Roth IRA tax-free status carry over to NZ?

NZ does not follow US tax labels. IRD has not addressed Roth IRAs; get advice.