3226

NEW ZEALAND GAZETTE

No. 131

(2) In a year before the year in which you are required to do a base price adjustment for the foreign currency ASAP, calculate your income or expenditure by applying an available method under the qualified accruals rules to calculate the foreign currency income or expenditure you would have if you were party to a foreign currency loan or loans as set out above in ‘Method—General’.

(3) In calculating this income or expenditure, treat the foreign currency loan or loans as if they were in NZ$. In particular, do not apply Determination G9A to the loan contract. Then convert the foreign currency income or expenditure into NZ$ using the spot rate on the payment date. If there is more than one payment date, use the weighted average of the spot rates. For payment dates occurring after the last day of the year, use the spot rate on that day.

(4) Also take into account as income or expenditure in any year up to and including the year in which the settlement date occurs, the amount

a – b

where

‘a’ is the NZ$ value of the lowest price converted using either

(i) if the settlement date is after the end of the year, the forward rate from the last day of the relevant income year to the settlement date;

(ii) in any other case, the spot rate on settlement date.

‘b’ is the NZ$ value of the lowest price converted using the forward rate to the settlement date from whichever is the later of:

(i) the last day of the previous income year;

(ii) the contract date.

using a reasonable estimate of the settlement date at that time (unless a(ii) applies).

(5) If a – b is negative, this amount will be income if you are the buyer, and expenditure if you are the seller. If a – b is a positive, the amount will be income if you are the seller, and expenditure if you are the buyer.

9. Rate C and Method C—Spot Rate at Rights Date—(1) If you adopt Method C, you must use rate C to calculate the NZ$ value of the lowest price.

(2) In a year before the year in which you are required to do a base price adjustment for the foreign currency ASAP, calculate your income or expenditure by applying an available method under the qualified accruals rules as if you were party to a loan or loans as set out above in Method—General’.

(3) Because you are using the spot rate at rights date to convert the foreign currency core acquisition price to NZ$, you will not have any income or expenditure for tax purposes in the period between the contract date and the earlier of the rights date or the first payment date.

10. Rate D and Method D—Spot Rate at Contract Date—(1) If you adopt Method D, you must use Rate D to calculate the NZ$ value of the lowest price.

(2) If you adopt Method D, then even if there is no difference between the foreign currency price and the foreign currency lowest price, you will have income/expenditure if there is a change in the spot rate from the contract date to the payment date.

(3) In a year before the year in which you are required to do a base price adjustment for the Foreign currency ASAP, calculate your income or expenditure by applying an available method under the qualified accruals rules as if you were party to a loan or loans as set out above in ‘Method—General’.

(4) Because you are using the spot rate at contract date to convert the foreign currency core acquisition price to NZ$, you must take into account as income or expenditure, in any year up to and including the year in which the rights date occurs, the amount

a – b

where:

‘a’ is the NZ$ value of the lowest price converted using the spot rate on the earlier of the last day of the relevant income year and the rights date

‘b’ is the NZ$ value of the lowest price converted using the spot rate on whichever is the later of the last day of the previous income year and the contract date.

(5) If a – b is negative, this will be income if you are the buyer, and expenditure if you are the seller. If a – b is positive, this will be income if you are the seller, and expenditure if you are the buyer.

11. Rate E and Method E—Spot Rate at Payment Date—(1) If you adopt Method E, you must use Rate E to calculate the NZ$ value of the lowest price, subject to (2)(ii) below. If there is more than one payment date, you must use the weighted average of the spot rates on the payment dates.

(2) If you need to know the NZ$ price of the property for the purpose of calculating your assessable income for an income year (other than under the qualified accrual rules), and any payments under the foreign currency ASAP are made after the end of the relevant year, you must determine the NZ$ value of the lowest price by converting those payments into NZ$ at either:

(i) the spot rate on the payment date if the agreement is completed before you are required to file your income tax return for the relevant year, and you elect to use that rate; or

(ii) the spot rate on the last day of the relevant year.

(3) If you choose to use Method E, and if there is no difference between the foreign currency price and the foreign currency lowest price (plus any amount comprised in item x in the core acquisition price definition), you will have no income or expenditure under the qualified accruals rules from the foreign currency ASAP (unless paragraph 2(ii) applies).

(4) In a year before the year in which you are required to do a base price adjustment for the foreign currency ASAP, calculate your income or expenditure from the ASAP as the result of

a – b – c

where:

‘a’ is the NZ$ value of the price. Determine this NZ$ value by converting the price into NZ$ using the spot rate on the payment date or payment dates. Convert any payments required to be made after the end of the year:

at the spot rate on the last day of the year; or

if the agreement matures before the date on which you must file your tax return for the year, at the spot rate on the relevant payment date, if you elect to use that rate;

‘b’ is the NZ$ value of the lowest price. Determine this NZ$ value by converting the lowest price into NZ$ using the spot rate used to calculate ‘a’, or the weighted average of the spot rates if there is more than one payment date. However, if you have taken the cost of the property into account in calculating your assessable income (other than under the qualified accrual rules) in a previous income year, you must calculate the NZ$ value of the lowest price using the same exchange rate used to calculate the lowest price in that previous income year.

‘c’ is the NZ$ value of the unaccrued difference between