Overseas shares - IRD's IR3

[ratkin]

It is really messed up. I have shares in Two Australian listed funds, both run by Magellan
MHH high conviction fund and MFF Magellan capital investments fund. Both seem to have a similar structure yet MHH is not FIF exempt but MFF is. I can’t see the logic, all very confusing.

Does the status stay the same year after year? According to current rules I would be better off putting any excess over 50k into MHH, but could the status change year on year?

[777]

It is really messed up. I have shares in Two Australian listed funds, both run by Magellan
MHH high conviction fund and MFF Magellan capital investments fund. Both seem to have a similar structure yet MHH is not FIF exempt but MFF is. I can’t see the logic, all very confusing.

Does the status stay the same year after year? According to current rules I would be better off putting any excess over 50k into MHH, but could the status change year on year?

If you are wanting to stay clear of FIF then would you not need to invest in MFF rather than MHH?

[Snow Leopard]

It is really messed up. I have shares in Two Australian listed funds, both run by Magellan
MHH high conviction fund and MFF Magellan capital investments fund. Both seem to have a similar structure yet MHH is not FIF exempt but MFF is. I can’t see the logic, all very confusing.

Does the status stay the same year after year? According to current rules I would be better off putting any excess over 50k into MHH, but could the status change year on year?

As with many of the great quotes about Life (the Universe & Everything) it was Douglas Adams who coined the phrase

Rigidly defined areas of doubt and uncertainity

The 'logic' is straight forward:

MHH is predominantly/totally invested in companies outside of Oz/NZ offers no franking on dividends and you is totaly FIffed.

MFF investments included a sufficient % of Australian companies and provides sufficient franking with their dividends that they are the on otherside of the 'threshold' and are FIF exempt.

These statements are true for the last tax year.


Other years?
Well that depends on that magical dividing line as to whether they will be on one side or the other, and how you will have to account for them.

Good old Douglas, I miss him.

[ratkin]

The 'logic' is straight forward:

MHH is predominantly/totally invested in companies outside of Oz/NZ offers no franking on dividends and you is totaly FIffed.

MFF investments included a sufficient % of Australian companies and provides sufficient franking with their dividends that they are the on otherside of the 'threshold' and are FIF exempt.

These statements are true for the last tax year.


.

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Here is the list of MFF investments over 0.1% of their portfolio and I am not seeing any Australian companies. So unless the “sufficient amount” is miniscule then I am still in the dark as to why Mhh had Fif but Mff does not.