Skip to Content
You are here: Home › Help › Online forms help › Other products
Help
Other products

Online help for the Foreign Investment Fund calculator

Fair dividend rate (FDR) and comparative value (CV)

To obtain an FDR and CV calculation, you must complete all the FDR and CV input fields. If you do not, you will only receive an FDR calculation.

To use both methods:

  • You must be a natural person (not a company or trust) who owns a share in a foreign company.
  • Your direct income interest in the foreign investment fund must be less than 10% at all times during the income year if the foreign company is not in a grey list country. However, if the foreign company is in a grey list country the requirement has only to be met at one point in time in the income year.

The fair dividend rate method can only be used if you are able to ascertain the market value of the share at the beginning of the income year.

FDR cannot be used if:

  • the share is a fixed rate share
  • the share is a non-participating redeemable share
  • the investments which involve an effectively non-contingent obligation
  • the Commissioner has determined that the FDR is not applicable

In any of these circumstances, you will need to use the comparative value method only

The CV method can only be used if you are able to ascertain the market value of the share at the beginning and end of the income year

Note: "Cherry picking" is not permitted for investments where FDR and CV methods are both available.

Comparative value (CV)

Use this method if you have a guaranteed return investment for which the FDR calculation method is not permitted.

This is only for the following five types of guaranteed investments where the attributing interest is less than 10%:

  • Fixed-rate share investments in foreign countries.
  • Non-participating redeemable share investments in foreign companies.
  • Investments which involve an effectively non-contingent obligation.
  • The Commissioner has made a determination.
  • Investments in non-resident companies whose assets comprise 80% or more new Zealand dollar denominated financial arrangements (debt instruments).

Your direct income interest in the foreign investment fund must be less than 10% at all times during the income year if the foreign company is not in a grey list country.

However, if the foreign company is in a grey list country the requirement has only to be met at one point in time in the income year.

The CV method can only be used if you are able to ascertain the market value of the share at the beginning and end of the income year.

Cost method

To obtain a cost calculation, you must complete the relevant cost input fields. If this is the first year of investment ownership, please enter the fields that refer to the current year and the valuation/revaluation field.

To use cost:

  • You must be a natural person (not a company or trust) who owns a share in a foreign company. Your direct income interest in the foreign investment fund must be less than 10% at all times during the income year if the foreign company is not in a grey list country. However, if the foreign company is in a grey list country the requirement has only to be met at one point in time in the income year.
  • The cost method can only be used if you are unable to ascertain the market value of the share at the beginning of the income year. You must obtain an independent valuation of your share prior to using cost method calculation.

 

Grey outline box with round corners.
Other pages in this section
Grey outline box with round corners.

 

 


Date published: 15 Jun 2007

Back to top


Individuals & Families

Businesses

Not for profit groups

Non-residents & visitors