Investing in US shares and ETFs from New Zealand involves thinking about taxes in both countries. We know this can sound complicated, so let's break it down simply:
US Taxes & the W-8BEN Form
When you invest in the US, there's usually a US tax on any dividends you earn.
The good news is we can help you reduce this! As part of signing up online for Kernel's US Shares and ETFs product, you'll fill out a quick digital form called the W-8BEN.
This form confirms you're an NZ tax resident, which automatically lowers the US tax withheld on your dividends from 30% down to just 15%.
Since it's built into the application, it's super easy to complete. Plus, it stays valid for three years!
NZ Taxes & FIF Rules
You'll also need to consider your US investments when doing your New Zealand taxes. Keep in mind that if the total value of all your overseas investments (not just the ones with Kernel) goes over NZ$50,000, special NZ tax rules called the Foreign Investment Fund (FIF) rules might apply.
Making Tax Time Easier: What Documents We Provide
We aim to make tax season less stressful! Every year by June, we'll provide helpful tax documents in your account. These include:
Annual Dividend Summary: A simple list showing all the dividends you received.
Withholding Tax Details: Proof of the US tax already paid for you.
Transaction History: Information to help if you need to calculate capital gains.
FIF Income Calculations: If the FIF rules apply based on your investments with us, we'll provide calculations to assist you.
These documents should give you and your tax advisor everything needed for your NZ tax return.