Budget 2026 (announced 28 May 2026) proposes that founders and active investors who once held at least a 10% stake in a foreign-domiciled company can keep using the Attributable FIF Income (AFI) method even after capital raises dilute them below 10%, avoiding a forced switch to the harsher Fair Dividend Rate. The same package roughly doubles the FIF de minimis threshold from $50,000 to $100,000, effective from 1 April 2026, and expands the 10-year FIF exemption to cover offshore migrations, foreign listings and SPAC transactions.
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Budget 2026 FIF change lets diluted founders keep the AFI tax method
Why this matters for founders
NZ founders holding shares in a US/Delaware or other foreign-incorporated company should review their FIF method now, since staying on AFI through funding rounds can materially lower tax on paper gains. Talk to your accountant before filing, as the changes are expected to be legislated around August-September 2026 and apply back to 1 April 2026.
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