New Zealand — Capital Gains

Core rule: no general CGT

New Zealand does not have a general capital gains tax. Gains from the disposal of most assets — shares, bonds, investment properties held long-term — are not taxed.

However, several regimes effectively tax certain gains:

Share trading: investor vs trader

NZ does not tax investment gains on shares, but share trading income is taxable as ordinary income if the IRD determines the person is carrying on a business of share trading.

The distinction is based on intent at the time of purchase — if shares are acquired with the purpose of resale, gains are taxable.

For most private investors making buy-and-hold investments: no tax on gains.

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Foreign Investment Fund (FIF) regime

New Zealand residents holding foreign shares (outside Australian shares listed on an Australian exchange, below NZD $50,000 in total) are subject to the FIF regime:

• Tax is calculated on a deemed income basis (fair dividend rate method: 5% of opening market value per year), NOT on actual gains/dividends
• Applies to each share in a non-Australian foreign company
• Only applies if total cost of foreign investments exceeds NZD $50,000

This is a significant complexity for NZ residents with offshore share portfolios.

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Exit from New Zealand

No general exit tax in New Zealand. When you cease to be a NZ tax resident:

• FIF regime ceases to apply to foreign shares from departure date
• Bright-line test: property sold after departure — may still trigger if within the bright-line period and you were NZ resident when it was purchased

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Sources

• Income Tax Act 2007 (NZ), subpart CB (property income rules)
• Bright-line test: IR.govt.nz/brightline
• FIF regime: Income Tax Act 2007, subpart EX

Working paper only. The FIF regime is complex and depends on the specific foreign investments held. The bright-line test periods have changed multiple times — confirm the applicable period based on the purchase date. Have a qualified NZ chartered accountant review.