u/Dazzling_Smile9688

I've been gifted some redeemable preference shares in a UK company, and someone told me I may need to pay an annual FIF tax.

They are in total a lot more that the $50k minimum.

Problem is that these redeemable preference shares are at a fixed value per share and the class of share means they will never increase in value (in UK pounds) and they can only be redeemed when the company wants to.

So I may be in a situation where I have to pay FIF tax based on currency gains on something that I have not received and may never receive (as company could choose not to redeem them).

Anyone come across this before?

Hoping someone can help as tearing my hair out.

I am about to get a gift of some foreign "redeemable preference shares" which are worth more than $50k.

Because of the class of share, there are no rights, so I am not allowed to sell them, and they do not pay a dividend, and they do not increase in value (at least not in the currency they are in). The business can choose to redeem them when they want to, which would result in them paying their face fixed value (unrelated to whether the business was doing better than now or not).

Problem I have is that I have been told that I could be liable for NZ FIF tax. But I am not receiving anything from them for many years, and cannot even sell them to pay the annual tax.

Many years from now, the business that they are in may start making a profit and then redeem these shares. At that point I would receive some money.

I am really worried that I will need to pay a tax of either "Fair Dividend Rate" of 5% or a tax based on currency fluctuation if I go for Comparative Value method (if currency of the shares increases against NZD, then there has been a gain :-(

Right now it is not feeling like a give - more of a liability.

Does anyone know of a way to avoid paying these taxes until a point in the future when I can either sell the shares, or the business chooses to redeem them?

Not looking to avoid paying tax when I actually receive an income (or even when I have the potential to receive an income).

Thank you