Skip to main content

COVID-19 - Level 1 If you've been affected by COVID-19, we may be able to help. Find out more

This information supports the foreign investment fund (FIF) calculator and should not be read on its own.

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

To get 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.

The FDR method can only be used if you are able to confirm the market value of the share at the beginning of the income year. If the market value at the start of the year can only be obtained by independent valuation, you must instead use the cost method.

FDR cannot be used if:

  • The share is a fixed rate share.
  • The share is a non-participating redeemable share.
  • The share involves a non-conditional obligation for a person to provide the investor an amount that is more than the issue price.
  • We have determined that the FDR is not applicable.
  • The share is in a non-resident company whose assets comprise 80% or more New Zealand dollar denominated financial arrangements (debt instruments).
  • The share is in a related non-resident that is not a foreign PIE equivalent or it is part of a structured arrangement and the non-resident is able to deduct dividends paid on the share.

In any of these circumstances, you will need to use the CV method.

You must use the deemed rate of return method instead of the CV method if you are unable to confirm the market value of the share at the income year.

Note:

"Cherry picking" is not permitted for investments where FDR and CV methods are both available. You must apply the same method to all foreign investments where your shareholding is less than 10%.

For dividends received, make sure the dividend date is the date that the dividend is declared and not the date you actually receive the money.

Comparative value (CV)

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

This is only for the following types of guaranteed investments:

  • Fixed-rate share investments in a foreign company.
  • Non-participating redeemable share investments in a foreign company.
  • A share which involves a non-conditional obligation for a person to provide the investor an amount that is more than the issue price.
  • We have made a determination that the fair dividend rate method is not available for the share.
  • The share is in a non-resident company whose assets comprise 80% or more New Zealand dollar denominated financial arrangements (debt instruments).
  • The share is in a related non-resident that is not a foreign PIE equivalent or it is part of a structured arrangement and the non-resident is able to deduct dividends paid on the share.

You must use the deemed rate of return method instead of the CV method if you are unable to confirm the market value of the share at the end of the income year.

Cost method

To get 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.

Use this method if you are unable to confirm the market value of the share at the beginning of the income year. You must get an independent valuation of your share before using cost method calculation.

For dividends received, make sure that the dividend date is the date that the dividend is declared and not the date that you actually receive the money.

Calculate my foreign investment fund income