Announcements
PUBLISHED 21 May 2002

Deemed rate of return, FBT for low-interest loans increase

The deemed rate of return for foreign investment fund interests has increased to 10.46% for the 2001-02 income year, and the interest rate used to calculate fringe benefit tax for low-interest, job-related loans increases to 7.5% from 1 July 2002. The measures were approved by Orders in Council yesterday. For more information see the government's media statements:


Hon Dr Michael Cullen
Minister of Revenue

MEDIA STATEMENT

Increase in deemed rate of return for foreign investment fund interests

The deemed rate of return for foreign investment fund interests has increased from 10.29 percent to 10.46 percent for the 2001-02 income year, Revenue Minister Michael Cullen announced today.

The foreign investment fund rules tax New Zealand residents on undistributed profits arising in foreign entities in which they have invested but do not control.

The rate, which is set annually, applies to all types of investments, including interests in superannuation schemes and life insurance policies. It is based on an average of five-year government stock rates to which a margin of 4 percent is added.

Contact: Patricia Herbert [press secretary] 04-471-9412 or 021-270-9013. E-mail [email protected]


Hon Dr Michael Cullen
Minister of Revenue

MEDIA STATEMENT

FBT for low-interest loans up

The prescribed rate of interest used to calculate fringe benefit tax for low-interest, employment-related loans has increased from 6.7 percent to 7.5 percent, Revenue Minister Michael Cullen announced today.

The new rate applies from l July 2002.

The rate is reviewed regularly to ensure it is in line with the results of the Reserve Bank's regular survey of first mortgage interest rates. It last changed on 1 January.

Contact: Patricia Herbert [press secretary] 04-471-9412 or 021-270-9013. E-mail [email protected]