3158 NEW ZEALAND GAZETTE, No. 120 8 NOVEMBER 2007

Product: Viramune
Active Ingredient: Nevirapine 200mg
Dosage Form: Tablet
New Zealand Sponsor: Boehringer Ingelheim (NZ) Limited
Manufacturers: Boehringer Ingelheim Pharmaceuticals Inc, Danbury, Connecticut, United States of America
Boehringer Ingelheim Roxane Inc, Columbus, Ohio, United States of America

Note: This consent is valid for two years from 4 December 2007.

Dated this 1st day of November 2007.

JOHN HAZELDINE, Acting Deputy Director-General, Sector Accountability and Funding Directorate (pursuant to delegation
given by the Minister of Health on the 6th day of July 2001).

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Inland Revenue

Tax Administration Act 1994

Notice of Determination

The following determination (FDR2007-04), concerning
New Zealand resident investors’ ability to use the fair
dividend rate method for an interest in a type of foreign
investment fund, was made by the Deputy Commissioner,
Policy, Inland Revenue, under section 91AAO of the Tax
Administration Act 1994 on 12 October 2007.

**“Determination

Reference**

This determination is made under section 91AAO(1)(a) of
the Tax Administration Act 1994.

This power has been delegated by the Commissioner of
Inland Revenue to the Deputy Commissioner, Policy, under
section 7 of the Tax Administration Act 1994.

Discussion (which does not form part of the determination)

Units in a non-resident issuer to which this determination
applies are an attributing interest in a FIF for New Zealand
resident investors.

New Zealand resident investors are required to apply the
foreign investment fund rules to determine their tax liability
in respect of their units in the non-resident issuer each year.

Due to the presence of specified lock-in thresholds, section
EX 40(9) of the Act applies to units in the non-resident
issuer and prevents use of the fair dividend rate method in
the absence of a determination under section 91AAO of the
Tax Administration Act 1994.\n
Despite the presence of specified lock-in thresholds,
I consider that it is appropriate for New Zealand resident
investors in this arrangement to use the fair dividend rate
method.

The overall arrangement (as described to me by the applicant)
contains sufficient risk so that it is not akin to a New Zealand
dollar-denominated debt instrument that effectively provides
guaranteed returns.

Scope of Determination

The investments to which this determination applies are
units in a non-resident issuer which:

(a) is one of the Credit Suisse PL100 series of trusts;

(b) is a unit trust constituted under New South Wales
law;

(c) issues New Zealand dollar denominated units
(not being fixed rate shares or non-participating
redeemable shares) to New Zealand resident
investors;

(d) indirectly offers New Zealand resident investors
the benefit of capital protection and rising capital
protection;

(e) invests proceeds from the issue of units in a physical
basket of securities upon which dividends may be
paid;

(f) converts any dividends derived from the physical
basket of securities to New Zealand dollars and
distributes such dividends to New Zealand resident
investors from time to time; and

(g) enters into a specified call and put option arrangement
in relation to a hedging portfolio.

Interpretation

In this determination, unless the context otherwise requires:

‘Capital protection’ means an arrangement under which
an investor receives an amount from the issuer equal to
the New Zealand dollar issue price for each unit held
by the investor at maturity;

‘Fixed rate share’ means a fixed rate share under section
LF 2(3) of the Act;

‘Hedging portfolio’ means a notional portfolio of shares
and fixed income securities that requires 25% minimum
participation in notional share investments at all times;

‘Non-participating redeemable share’ means a non-
participating redeemable share under section CD 14(9)
of the Act;

‘Non-resident’ means a person that is not resident in
New Zealand for the purposes of the Act;

‘Physical basket of securities’ means a portfolio of
shares or other securities physically held by the issuer;

‘Rising capital protection’ means an arrangement
under which an investor receives an amount from the
issuer which exceeds the New Zealand dollar issue
price for each unit held at maturity if any specified
lock-in threshold is reached, irrespective of the value of
the issuer’s underlying investments at maturity;

‘Specified call and put option arrangement’ means an
arrangement consisting of two separate option contracts
entered into simultaneously by the issuer and a
counterparty under which:

(a) the issuer is able to transfer the physical basket
to the counterparty in exchange for an amount
equal to the value of the hedging portfolio (in
New Zealand dollars) if the value of the hedging
portfolio at maturity (less a portfolio fee) is equal to
or greater than the value of the physical basket; and

(b) the counterparty is able to require the issuer to
pay the counterparty the shortfall in value between
the physical basket and the hedging portfolio (in
New Zealand dollars) if the value of the hedging
portfolio at maturity (less a portfolio fee) is less
than the value of the physical basket;