PIE Fund vs FIF Calculator NZ

Compare the estimated annual tax and fund fees of a New Zealand PIE fund with a direct foreign investment under the FIF rules.

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PIE prescribed investor rate
Marginal income tax rate
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Your estimate

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Estimated annual difference

$220

The direct foreign investment costs $220 less under these assumptions.

PIE fund annual cost

$1,900

$1,400 estimated tax plus $500 in fund fees.

Direct foreign investment annual cost

$1,680

$1,650 estimated tax plus $30 in fund fees.

FIF rules apply in this estimate. Direct taxable income is 5.0% of the opening balance, using the lower of the 5% fair dividend rate and the entered nonnegative total return.

How this calculator works

This calculator compares one year of estimated tax and fund fees for foreign share exposure. It applies the standard 5 percent fair dividend rate to the PIE. For an eligible individual using a direct foreign investment, it uses the lower of 5 percent or a nonnegative total return when the FIF rules apply. At or below the threshold, it assumes the exemption is used and taxes dividends instead.

Important assumptions

  • The PIE is a multi rate PIE holding foreign shares that uses the fair dividend rate method.
  • The direct investor is an eligible New Zealand resident individual who can use the fair dividend rate or comparative value method.
  • The $50,000 threshold uses the total purchase cost of all FIF interests that are not exempt and are held at any time in the year.
  • Foreign tax credits, deductible expenses, quick sale adjustments, trading costs, currency movements, and adviser or accounting costs are not included.

These results are general illustrations only and are not financial advice. Actual outcomes can differ.

Sources: Inland Revenue guidance on foreign investment funds, Inland Revenue guidance on PIE income for New Zealand residents, Inland Revenue guidance on individual tax rates.

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