This Foreign Investment Fund calculator uses the Deemed Rate of Return, which is also known as the DRR method to calculate the FIF income.
You can only use the DRR method if you meet one of the following conditions.
The calculation for this method is the opening book value multiplied by the deemed rate the opening book value is the book value of the attributing interest at the end of the previous income year. The deemed rate is set by the Governor General by order in the council for the relevant income year.
In the DRR method calculator below, there are four main parameter values for the user to enter. These are the financial year that you would like to perform the calculation on, the opening market value for the year, the number of shareholding changes that have occurred in the year, and your tax rate. The calculation tool already has the relevant deemed rate loaded for all of the available financial years.
The question that asks "How many shareholding changes occurred during the year (period)" relates to the number of changes that occurred during the year, as the tool calculates the tax from the balance of the account on each of those days throughout the year. In an example where there were zero shareholding changes throughout the year, the opening balance for the period would also equal the closing period. An example of this is if Person A had an opening market value for the year of $100,000, $500 costs, with zero changes and a tax rate of 33% the following would apply.
As they had the same balance for the 365 days in the year of $100,000 as there were no changes, and they had costs of say $500 the calculator would calculate the deemed tax rate of 6.01% for FY22 on the $100,000 as ($100,000 + $500) * (6.01/365) * 365 which equals $6,040. $6,040 at a tax rate of 33% leads to the tax owing of $1,993.22.
If you're looking to choose a platform with simple & transparent pricing where you actually own the shares you're buying, we recommend Hatch Invest. Use this link to signup and we both get a $10 NZD bonus top up when you make an initial deposit of $100 NZD or more.
The 2022 Financial Year Starts on
The 2022 Financial Year Ends on
Opening Market Value for Year
How many shareholding changes occurred during the year (period)
This is the number of shareholding changes that were made in the year after the opening of the period. If you had 3 shareholding changes, the calculator will display the calculation from the continuation of the opening balance, then the three change calculations.
Tax rate to apply
Date of change Continuation of Opening Balance
Opening value book value
The book value at the end of the period prior to this part of the income year. This is calculated as the opening book value + costs + deemed income + top-up amounts + gains
All expenditure incurred in acquiring or increasing the interest and income tax on the income of the FIF for which the person is liable under the laws of a county other than New Zealand
This is the sum of the opening book value and costs, multiplied by the proportion of days that the balance existed in the year, multiplied by the deemed rate.
This is your personal tax rate as dicated by the IRD
FIF deemed rate of return is set each year and is one of the ways you can work out income from foreign investment fund interests.
Number of days in the part of the income year which the shareholding didn't change.
If you've found a bug, or would like to contact us please click here.
Calculate.co.nz is partnered with Interest.co.nz for New Zealand's highest quality calculators and financial analysis.
Copyright © 2019 calculate.co.nz All Rights Reserved. No part of this website, source code, or any of the tools shall be copied, taken or used without the permission of the owner. All calculators and tools on this website are made for educational and indicative use only. Calculate.co.nz is part of the GST Calculator, PAYE Calculator,and Salary.co.nz group.