Quote Originally Posted by SBQ View Post
Once you exceed the $50K threshold, then FIF applies for that whole taxation year.

Short answer, yes FIF applies because you started with a $0 balance and ended with more than $50K during the tax period.

This paper gain tax does not apply on the final year you withdraw all the funds out. That is the only advantage I see with FIF as a person in the last year of investing could amassed a large capital gain, but would not have to declare it under FIF if the account was closed and all the cash proceeds held in NZ terms. As the FIF calculation goes, they look at the total portfolio balance from April 1st to end of March 31st. If the shares were held for many years and that last final year was a whopper, you would pocket that capital gain as long as you sold and held the account under the $50K threshold before March 31st.
Thanks so much.

Am I right in thinking that the fair dividend rate calculation is on the opening balance of $0 this year?

That would mean no tax to pay this year but next year I get hit with 5% of the opening value?