Cash surrender value method

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Overview

The cash surrender value method of working out FIF income applies only to FLPs.

This method decides whether any FIF income accrues to you from an interest in an FLP by taking into account changes over a 12-month period in the cash surrender value of your interest in the FLP.

Under the cash surrender value method, the amount of the FIF income is calculated in two steps:

1. The first step works out the movement in the cash surrender value of the FLP, generally between two annual reporting dates.
2. The second step allows an adjustment for losses of prior years.

The result of these calculations is the amount of foreign investment fund income that you must include in your assessable income.

The following information will help you to complete Worksheet 5: Cash surrender value method for FLPs.