General rule
(1) A person has FIF income in an income
year if—
(d) if the person is a natural person and not acting as a trustee,
the person holds, at any time in the year when the person is a New Zealand resident, attributing interests
in FIFs for which the total of the following amounts is more than
$50,000:
(ii) if the person acquired the interest before
1 January 2000 and chooses, for the year or an earlier year, that
this subparagraph and section DN 6(1)(d)(ii) (When FIF loss arises)
apply to all interests acquired before 1 January 2000, half of the
market value of the interest on 1 April 2007; and
(db) if the person is acting as a trustee
of a trust that meets the requirements of subsection (5), the person holds, at any time in the year, attributing interests in
FIFs for which the total of the following amounts is more than $50,000:
(ii) if the person acquired the interest before
1 January 2000 and chooses, for the year or an earlier year, that
this subparagraph and section DN 6(1)(d)(ii) apply to all interests
acquired before 1 January 2000, half of the market value of the interest
on 1 April 2007; and
(f) under the relevant calculation method chosen by the person,
an income amount is calculated for the year under sections EX 38 to EX 45B (which relate to
the calculation of FIF income or loss), EX 48 (Top-up FIF income:
deemed rate of return method), or EX 49 (Top-up FIF income:
1 April 1993 uplift interests).
Treatment of
deemed transaction under section EX 51, EX 53, or EX 54B
(1B) If a person
is treated under section EX 51(5) (Consequences of changes in
method), EX 53 (Changes in application of
FIF exemptions), or EX 54B (FIF rules first
applying to interest for income year beginning on or after 1 April
2007) as disposing of or acquiring rights in an income year, the disposal
or acquisition is ignored for the purposes of subsection (1)(d) and (db).
Look-through calculation methods
(2) Despite subsection (1), if the calculation
method is the accounting profits method or branch equivalent method,—
(b) the tests in subsection (1)(a), (b), (c), and (e) are applied on the
basis that references in subsection (1)(a), (b), (c), and (e) to any time in the
year are read as references to any time in the relevant accounting
period.
Special rule: CFC with FIF interest
(3) A person with
an income interest of 10% or more in a CFC can also have FIF income in an income
year under the special rule in section EX 46 (Additional FIF
income or loss if CFC owns FIF), which applies when the CFC has an
attributing interest in a FIF (whether or not the CFC is an unqualified
grey list CFC under section EX 22 (Unqualified grey
list CFCs)).
Treated as derived while person New Zealand resident
(4) FIF income
of a person who has ceased to be a New Zealand resident is treated
as being derived while the person was a New Zealand resident.
When application
of subsection (1) affected by subsection (1)(db)
(5) Subsection (1)(db) applies to the trustee
of a trust for an income year if—
Defined in this Act: accounting period, accounting profits method, amount, associated person, attributing interest, branch equivalent method, calculation method, CFC, FIF, FIF income, foreign company, foreign superannuation scheme, grey list, income, income interest, income year, life insurance policy, New Zealand resident, non-resident, relative, transitional resident, trustee,
Compare: 1994 No 164 ss CG 7(5), CG 15(1), (2),
CG 16(2), (5)
Subsection (1)(c)(i) to (v) was amended, as from 21 December 2004, by section 270 Taxation (Venture
Capital and Miscellaneous Provisions) Act 2004 (2004
No 111) by substituting “:”
for “; or”
.
Subsection (1)(c)(ii) was amended, as from 18 December 2006, by section 8(1)(a) Taxation (Savings
Investment and Miscellaneous Provisions Act 2006 (2006
No 81) by substituting “(Exemptions:
direct income interests in FIF in grey list country)”
for “(Grey list exemption)”
with
application as from the 2006–07 income year.
Subsection (1)(c)(iib)
to (iie) was inserted, as from 18 December 2006, by section 8(1)(b) Taxation (Savings
Investment and Miscellaneous Provisions Act 2006 (2006
No 81) with application as from the 2006–07 income year.
Subsection (1)(c)(iv) was substituted, as from 1 October 2005, by section 22(1)(a) Taxation (Depreciation,
Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3) with application for: a person who becomes a transitional
resident as from 1 April 2006; and as from the income year corresponding
to the 2005–06 tax year. See section 22(3) and (4) of that Act as to
the application of this amendment.
Subsection (1)(d) was substituted, as from 1 April 2007, by section 8(2) Taxation (Savings
Investment and Miscellaneous Provisions) Act 2006 (2006
No 81) . See section 8(7) of that Act as to
the application of this amendment for income years beginning on or
after 1 April 2007.
Section CQ 5(1)(d): amended (with effect from 1 April 2007), on 19 December
2007, by section 16(1)(a) of the Taxation
(Business Taxation and Remedial Matters) Act 2007 (2007
No 109).
Subsection (1)(db) was inserted, as from 1 April 2007, by section 8(2) Taxation (Savings
Investment and Miscellaneous Provisions) Act 2006 (2006
No 81) . See section 8(7) of that Act as to
the application of this amendment for income years beginning on or
after 1 April 2007.
Section CQ 5(1)(db): amended (with effect from 1 April 2007), on 19 December
2007, by section 16(1)(b) of the Taxation
(Business Taxation and Remedial Matters) Act 2007 (2007
No 109).
Subsection (1)(e) was substituted, as from 1 October 2005, by section 22(1)(b) Taxation (Depreciation,
Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3) with application for: a person who becomes a transitional
resident as from 1 April 2006; and as from the income year corresponding
to the 2005–06 tax year. See section 22(3) and (4) of that Act as to
the application of this amendment.
Subsection (1)(f) was substituted, as from 1 April 2007, by section 8(3) Taxation (Savings
Investment and Miscellaneous Provisions) Act 2006 (2006
No 81) . See section 8(7) of that Act as to
the application of this amendment for income years beginning on or
after 1 April 2007.
Section CQ 5(1)(f): amended (with effect from 1 April 2007), on 19 December
2007, by section 16(1)(c) of the Taxation
(Business Taxation and Remedial Matters) Act 2007 (2007
No 109).
Section CQ 5(1B) heading: inserted (with effect from 1 April 2007), on 19 December 2007, by section 16(2) of the Taxation
(Business Taxation and Remedial Matters) Act 2007 (2007
No 109).
Section CQ 5(1B): inserted (with effect from 1 April 2007), on 19 December
2007, by section 16(2) of the Taxation
(Business Taxation and Remedial Matters) Act 2007 (2007
No 109).
Subsection (5) and the preceding heading were inserted, as from 1 April 2007, by section 8(4) Taxation (Savings
Investment and Miscellaneous Provisions) Act 2006 (2006
No 81) . See section 8(7) of that Act as to
the application of this amendment for income years beginning on or
after 1 April 2007.
The
list of defined terms was amended, as from 1 October 2005, by section 22(2) Taxation (Depreciation,
Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3) by inserting “transitional resident”
with application
for: a person who becomes a transitional resident as from 1 April
2006; and as from the income year corresponding to the 2005–06
tax year. See section 22(3) and (4) of that Act as to
the application of this amendment.
The list of defined terms was amended, as from 1 April 2007, by section 8(5) Taxation (Savings
Investment and Miscellaneous Provisions) Act 2006 (2006
No 81) by inserting “associated
person”
and “relative”
.