Cases of entry into and exit from FIF rules

EX 64 Migration of persons holding FIF interests
Leaving New Zealand

(1)

Subsection (2) applies if a person—

(a)

ceases to be resident in New Zealand; and

(b)

holds an attributing interest in a FIF at the time; and

(c)

for the period before the change of residence, calculates FIF income or loss from the interest using—

(i)

the comparative value method:

(ii)

the deemed rate of return method:

(iii)

the fair dividend rate method:

(iv)

the cost method.

Treatment as disposal at market value

(2)

The person is treated as—

(a)

having disposed of the interest immediately before the change of residence for an amount equal to its market value at the time; and

(b)

not holding the interest when not resident in New Zealand, unless they become resident again and subsections (3) and (4) apply.

Coming to New Zealand

(3)

Subsection (4) applies if a person—

(a)

is a non-resident or a transitional resident; and

(b)

becomes a New Zealand resident who is not a transitional resident; and

(c)

holds an attributing interest in a FIF at the time; and

(d)

for the period after the change of residence or status, calculates FIF income or loss from the interest using—

(i)

the comparative value method:

(ii)

the deemed rate of return method:

(iii)

the fair dividend rate method:

(iv)

the cost method.

Treatment as acquisition at market value

(4)

The person is treated as—

(a)

having acquired the interest immediately after the change of residence or status for an amount equal to its market value at the time; and

(b)

not holding it when the person is a transitional resident or not a New Zealand resident, unless they had previously ceased being resident and subsections (1) and (2) applied.

Look-through calculation method: relevance of income interest rules

(5)

Subsection (6) applies if a person—

(a)

ceases to be—

(i)

a New Zealand resident who is not a transitional resident, and becomes a non-resident:

(ii)

a non-resident, and becomes a New Zealand resident who is not a transitional resident:

(iii)

a transitional resident, and becomes a New Zealand resident who is not a transitional resident; and

(b)

holds an attributing interest in a FIF at the time; and

(c)

for the accounting period in which the change occurs, uses the attributable FIF income method to calculate FIF income or loss from the interest.

Income interest rules

(6)

The income interest rule in section EX 16 is relevant to the calculation of the amount of FIF income or loss for the period.

Defined in this Act: accounting period, amount, attributable FIF income method, attributing interest, calculation method, comparative value method, cost method, deemed rate of return method, fair dividend rate method, FIF, FIF income, FIF loss, income interest, loss, market value, New Zealand, New Zealand resident, non-resident, resident in New Zealand, transitional resident

Compare: 2004 No 35 s EX 52

Section EX 64(2) heading: amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on 24 February 2016, by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section EX 64(2)(a): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on 24 February 2016, by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section EX 64(4) heading: amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on 24 February 2016, by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section EX 64(4)(a): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on 24 February 2016, by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section EX 64(5)(c): replaced (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 43(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section EX 64 list of defined terms accounting profits method: repealed (with effect on 1 July 2011), on 7 May 2012, by section 43(2)(a) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section EX 64 list of defined terms attributable FIF income method: inserted (with effect on 1 July 2011), on 7 May 2012, by section 43(2)(b) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section EX 64 list of defined terms branch equivalent method: repealed (with effect on 1 July 2011), on 7 May 2012, by section 43(2)(a) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).