Answer

Yes. The fund described appears to be a unit trust. A unit trust for New Zealand tax purposes includes any scheme or arrangement set up for subscribers, purchasers or contributors to participate in income and gains, including capital gains. Unit trusts are taxed in the same way as companies ¾ in other words, all distributions are treated as dividends.

In addition, for New Zealand domestic tax law purposes, your client's interest in the fund is an interest in a foreign investment fund. Your client would, therefore, potentially have to disclose his or her interest in the fund and possibly pay New Zealand income tax on the change in market value of his or her interest in the fund over the income year, adjusted for cash flows such as distributions.

There are a number of exceptions which should apply to take the fund out of this taxing regime. The exceptions are quite specific. Without knowing the exact terms of this fund or the level of investment, it is difficult to make an unequivocal call on whether the foreign investment fund rules will apply.
However, if the fund is Australian resident and subject to Australian income tax, your client's interest should fall outside the FIF regime on the basis that it is an interest in a "grey list" resident fund. See s CG 15(2)(b).