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EX 46: Limits on choice of calculation methods
or “Rules for choosing how to calculate Foreign Investment Fund income or loss”
You could also call this:

“Special calculation method needed for certain foreign shares”

You need to use a specific method to calculate your Foreign Investment Fund (FIF) income or loss for certain types of shares. These shares are called non-ordinary shares and are described in another part of the law. You have two options for calculating your FIF income or loss:

  1. You can use the comparative value method. This is the main method you should try to use.

  2. If you can’t use the comparative value method because you can’t figure out how much the shares are worth at the end of the year, you can use the deemed rate of return method instead.

You must use one of these two methods for your non-ordinary shares when working out your FIF income or loss for the year.

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Next up: EX 47B: Method required for shares subject to certain returning share transfers

or “How to calculate income for borrowed foreign shares”
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Part E Timing and quantifying rules
Controlled foreign company and foreign investment fund rules: Calculation of FIF income or loss

EX 47Method required for certain non-ordinary shares

  1. A person must calculate FIF income or loss for an income year from an attributing interest that is a non-ordinary share described in section EX 46(10) using—

  2. the comparative value method; or
    1. the deemed rate of return method, if use of the comparative value method is not practical because the person cannot determine the market value of the attributing interest at the end of the income year.

      Notes
      • Section EX 47: substituted (with effect on 1 April 2008), on , by section 174 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).