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Foreign investment fund (FIF) income

What is a foreign investment fund (FIF)?

A foreign investment fund (FIF) is an offshore investment held by a New Zealand-resident taxpayer who holds:

  • less than 10% of the shares in a foreign company
  • less than 10% of the units in a foreign unit trust
  • between 10% and 40% of the shares in a foreign company which is not a CFC
  • an interest in a life insurance policy where a FIF is the insurer and the policy is not offered or entered into in New Zealand
  • an interest in a foreign superannuation scheme.

It does not include interest earned from term deposits, bonds, debentures or money lent.

What is foreign investment fund (FIF) income?

Under the rules introduced in 2007, you have foreign investment fund (FIF) income when you have an investment that is an attributing interest in a foreign investment fund (FIF). This occurs when income from your investment is attributed to you, even though you may not have received any income at that point in time.

For more information about FIF read our guide A guide to foreign investment funds and the fair dividend rate (IR461).