A Foreign Investment Fund (FIF) is a weirdly complicated name for different types of overseas investments. These include:
Shares in overseas companies (like what you buy through Hatch)
a foreign unit trust (despite its name under NZ tax law these are treated as foreign companies, these could be things like foreign mutual funds)
Any overseas superannuation schemes
Life insurance policies you took out through an overseas provider.
These overseas investments are classified as FIF ‘income’. However, unlike other income you earn (like your salary or wages), there is a specific way to calculate FIF income.
Why do I need to care about FIF?
If the cost price of your overseas investments tips over $50,000 NZD at any point in the tax year, the FIF tax rules apply to you. You can find out your estimated peak investment cost at any time in the tax reports section in Hatch. After the end of every tax year, you can order a FIF report from the tax reports section, and we’ll calculate your Hatch FIF income for you.
If you have less than $50,000 NZD invested, then standard income tax rules apply.
Note: Your tax obligations are unique to you - if you're unsure, we recommend you seek professional tax advice. Your situation may change over time; it’s your responsibility to keep up to date with changes.