Your investment cost is the ‘cost value’ of your investments, sometimes called ‘cost basis’. It’s how much you paid for the shares in your portfolio – not their current value. With Hatch, your investment cost also includes your available balance because it‘s stored in a Money Market Fund.
From 2022, you'll be able to find your estimated investment cost for your Hatch investments in your annual Tax Reports. This will indicate if you’ve gone above the $50,000 NZD Foreign Investment Fund (FIF) threshold for your Hatch investments at any point during the tax year, which runs from 1 April to 31 March the following year.
Why do I need to know my investment cost?
When you buy stock in an overseas company or ETF (exchange traded fund) it means that you’ve bought into a ‘Foreign Investment Fund’ or a FIF. If the total amount you’ve invested in shares of FIFs is $50,000 NZD or more, then a special set of tax rules, known as the FIF rules, apply to you. Some Australian listed shares are exempt from these rules.
The FIF rules become important at tax time because they determine the way income from your overseas investments is taxed. The rules are essentially equations that calculate how much income you earn from your overseas investments (not the amount of tax you have to pay). Understand what you might need to do at tax time and more about the Hatch FIF Reports.