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  1. #21
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    Quote Originally Posted by Snoopy View Post
    Correct. The only paper trail available to support this FIF law is purchase receipts. That is why the FIF law is drafted as it is.

    However, in this time of antagonism towards cheques, that is forcing shareholders into Dividend Reinvestment Plans, those DRP purchases do count as purchases, even though no more cash from NZ is flowing overseas. So in such circumstances, it wouldn't be difficult for a $45k investment to creep over that $50k limit.

    SNOOPY
    Thank-you - so overall it would be difficult: the investor would need to decide to start with an initial portfolio that had no distributions at all - a listed fund of some type and just let it run...but funds shares can turn bad. Although sell, return it to NZD and repeat the exercise.

  2. #22
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    Quote Originally Posted by BeeBop View Post
    There is a point on the FIF that intrigues me and that is the $50k "acquired' cost. So if, someone starts with a portfolio of $45,000, purchasing a selection of overseas shares and they never add any more NZ money to that portfolio, by rights they never have to pay FIF even if their portfolio grows to $200,000?

    Note: this does not apply to me but it could relate to some newer NZ based investors.
    Are you sure about that? Under the FIF rules if using the FDR or CV methods market value at the beginning of the financial year is required. This is from the IRD guide page 15

    total amount of the interests doesn't exceed the NZ$50,000 threshold at any time in the year when you're a New Zealand resident (for a natural person), or any time in the year for the trustee of an eligible trust

    Or have a read and get back to me if I am wrong.

    https://www.ird.govt.nz/-/media/proj...ir461-2019.pdf

  3. #23
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    Quote Originally Posted by Aaron View Post
    Are you sure about that? Under the FIF rules if using the FDR or CV methods market value at the beginning of the financial year is required. This is from the IRD guide page 15

    total amount of the interests doesn't exceed the NZ$50,000 threshold at any time in the year when you're a New Zealand resident (for a natural person), or any time in the year for the trustee of an eligible trust

    Or have a read and get back to me if I am wrong.

    https://www.ird.govt.nz/-/media/proj...ir461-2019.pdf
    Actually I could be wrong I tried to read the legislation which takes me from Section CQ(5)(1)(d) to section EX 68 measurement of Cost but it confuses the hell out of me but I can't find any reference to market value.

    I guess a $49,000 investment in Tesla a few years ago might not be caught under the FIF rules.
    Last edited by Aaron; 08-01-2021 at 09:52 AM.

  4. #24
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    Quote Originally Posted by Aaron View Post
    Actually I could be wrong I tried to read the legislation which takes me from Section CQ(5)(1)(d) to section EX 68 measurement of Cost but it confuses the hell out of me but I can't find any reference to market value.

    I guess a $49,000 investment in Tesla a few years ago might not be caught under the FIF rules.
    I would imagine a fair % of NZ investors with shares under FIF are skirting IRD under the assumption that their purchases (kept under $50K) would not attract any FIF. How can it be this way? If total accumulated amount invested abroad (even under multiple accounts) exceeds $50K, then FIF applies.

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