28/05/2026
Budget 2026 and financial arrangement rules for migrants
Today’s Budget includes a welcome and long-awaited proposal to reform New Zealand’s financial arrangements rules — particularly for individuals holding investments in foreign currencies.
These rules have long created uncertainty for internationally connected clients. Because income is recognised on an accrual basis, unrealised foreign exchange movements can drive tax outcomes that bear little resemblance to actual cashflow.
For migrant clients in particular, this has meant exposure to volatile and sometimes unexpected tax positions year to year.
The proposed changes are a constructive step forward.
Key points include:
*Allowing certain taxpayers to calculate income in a foreign currency, reducing exposure to unrealised FX movements
*Targeted relief where cross-border double taxation arises
*A tailored approach for Active Investor Plus visa holders to avoid “on-arrival” tax distortions
*Excluding lower-risk, everyday foreign currency arrangements (such as personal accounts and mortgages) from the regime altogether.
If enacted as proposed, these changes should significantly improve certainty, align tax outcomes more closely with economic reality, and make New Zealand a more workable jurisdiction for globally mobile individuals.
Further, we are pleased to see the FIF de-minimus has been doubled to $100,000, meaning those with FIF investments under $100,000 will no longer need to account under the complex FIF rules.
Best of all, in our opinion, is the extension of the RAM FIF method to all taxpayers.
From our perspective, these are sensible and pragmatic shifts — and reflects the increasing complexity of cross-border investment and migration.
As always, the detail will matter, particularly around eligibility and how these rules interact with existing regimes (including FIF and transitional residency).
We will be watching closely as legislation is introduced. These changes are not included in the budget Bill, so we will need to hope they are enacted prior to the election, or are re-introduced by the newly formed government.
