US Shares - Taxation

[SBQ]

Investment returns from non-exempt Australian shares will be under FIF if the total purchase price of your entire overseas portfolio was over $50k. Note it is the purchase price in NZD that determines if the FIF regime is triggered or not. The current market price is not a factor.



Trading in non-exempt foreign shares does come under FIF, but there are special 'quick sale' provisions if you buy and sell within a year. See page 2 of this document.

https://home.kpmg/content/dam/kpmg/p...s-FIF-2015.pdf

SNOOPY

Hold on there... FIF has nothing to do with what 'purchase price' being under $50K. What triggers FIF is the TOTAL of ALL foreign accounts outside NZ. If a person had a UK broker + a US broker, the sum of these accounts if over $50K in value, will fall under FIF.

I've explained this here with a link directly from IRD's pdf docuement;

https://www.sharetrader.co.nz/showth...l=1#post857435

Your KPMG pdf doc also explains FIF as a threshold limit with an example on the right column of 2nd last page. Initially the person bought USCo under the FIF limit but his account balance triggered FIF once he bought UKCo. Once your account passes over the $50K NZD total, FIF kicks in for that year.

How about from IRD's point of view. Do you really think IRD will allow people to make multiple foreign share purchases in the amounts under $50K and let it compound 10 or 20 years which could end up over $500K or $1M and the NZ resident not pay a $1 in tax? I don't think so....