The main purpose of calculating your investment cost is to determine whether you fall under the Foreign Investment Funds (FIF) tax rules (i.e you have invested more than $50,000 NZD overseas). In Hatch, it’s calculated daily by adding the current NZD amount you paid for the shares you own and your available balance (money available to invest). If, on any day in the tax year your total investment cost is $50,000 NZD or more, you’ll fall under the FIF tax rules.
Your available balance is part of your investment cost because when you deposit money into Hatch, it’s held in a money market fund behind the scenes, which counts as a foreign investment under the FIF rules.
After the end of each tax year, you’ll be able to find your custom tax report in the Tax section in Hatch. If you have invested enough overseas to fall under the FIF rules (and even if you haven't), you’ll also be able to order a FIF report and have your Hatch FIF income calculated for you.
Your investment cost won’t include some investments like most Australian ADRs, or rights and warrants, because they’re exempt from the FIF rules. We update the list of excluded investments once a year when we prepare tax reports. If you own any exempt investments, your investment cost might decrease as a result.
You may also be interested in: