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EX 51: Comparative value method
or “How to calculate FIF income or loss using the comparative value method”
You could also call this:

“Rules for choosing between annual and periodic fair dividend rate methods”

When you calculate your FIF income from an attributing interest in a FIF for a current year using the fair dividend rate method, you need to follow some rules about which specific method to use.

You must use the fair dividend rate periodic method if you are a unit trust or similar entity that makes investments for other people, gives each investor a share of the returns, and figures out the value of each investor’s interests multiple times during the year.

You also have to use the fair dividend rate periodic method if you used it for the previous year, but used the annual method in one of the last four years, or since you got the attributing interest, or since the 2015-16 income year (whichever is shortest).

On the other hand, you must use the fair dividend rate annual method if you used it for the previous year, but used the periodic method in one of the last four years, or since you got the attributing interest, or since the 2015-16 income year (whichever is shortest).

These rules help make sure you’re using the right method to calculate your FIF income based on how you’ve done it in recent years.

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Next up: EX 52: Fair dividend rate annual method

or “Yearly calculation of income from overseas investments using a standard rate”
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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 52AFair dividend rate method: use of different forms

  1. This section applies when a person calculates FIF income from an attributing interest in a FIF for an income year (the current year) under the fair dividend rate method.

  2. A person must use the fair dividend rate periodic method under section EX 53 for the attributing interest for the current year if the person—

  3. is a unit trust or other entity that—
    1. makes investments for the benefit of other persons (the investors); and
      1. assigns each investor an interest in a proportion of the net returns from the investments; and
        1. determines the value of each investor’s interests for each of a number of periods making up the income year:
        2. for the attributing interest, uses the fair dividend rate periodic method for the income year ending before the beginning of the current year and uses the fair dividend rate annual method under section EX 52 for an income year included in the period that is the shortest of—
          1. the 4-year period ending before the beginning of the current year:
            1. the period from the beginning of the income year in which the person acquired the attributing interest and ending before the beginning of the current year:
              1. the period from the beginning of the 2015–16 income year and ending before the beginning of the current year.

              2. A person must use the fair dividend rate annual method for the attributing interest for the current year if the person uses for the attributing interest—

              3. the fair dividend rate annual method for the income year ending before the beginning of the current year; and
                1. the fair dividend rate periodic method for an income year included in the period that is the shortest of—
                  1. the 4-year period ending before the beginning of the current year:
                    1. the period from the beginning of the income year in which the person acquired the attributing interest and ending before the beginning of the current year:
                      1. the period from the beginning of the 2015–16 income year and ending before the beginning of the current year.

                      Notes
                      • Section EX 52A: inserted, on (applying for the 2016–17 and later income years), by section 149(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).