Exemption for a balanced investment portfolio in FIFs



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An exemption is provided for investment in non-exempt FIF activities if their aggregate value is not more than 10% of the value of your total investments in FIFs.

For the purposes of this exemption, your total investments do not include your interests which, at the end of a notional accounting period, are excluded from the FIF measures because you:

  • are an attributable taxpayer
  • have an interest in an employer-sponsored superannuation fund.

You value your FIF interests at the end of the income year at cost or market value, whichever is the greater. [section 525]

There are no restrictions on the types of FIFs that are eligible for this balanced portfolio exemption. The FIFs may include non-exempt activities such as financial services and they may or may not be listed on any stock exchange, approved or otherwise. They may also include trusts.

In the example below, Marika's interests in FIFs are excluded from the FIF measures because her interests in non-exempt FIFs are not more than 10% of her total FIF interests.

The United Kingdom superannuation fund is not included when working out total FIF interests, as it is an employer-sponsored superannuation fund.

Example:Investments in FIFs

Marika's FIF interest

Amount invested in FIFs

Exempt FIFs: percentage of total investments

Non-exempt FIFs: percentage of total investments

Company X - exempt shares listed on Athens stock exchange


($25,000/$166,000) x (100/1) = 15.1%


Foreign financial intermediation services company - non-exempt



($5,000/$166,000) x (100/1) = 3.0%

Company Y - satisfies active business exemption


($60,000/$166,000) x (100/1) = 36.1%


United Kingdom employer superannuation fund


This is a Division 11 of Part XI amount and is not included in the total of FIF investments


Bank of United States - satisfies bank exemption


($66,000/$166,000) x (100/1) = 39.8%


Swedish Foreign Trust - non-exempt



($10,000/$166,000) x (100/1) = 6.0%





Note: For assessments for income years beginning before 1 July 2003, the allowable value for non-exempt FIF activities to satisfy the balanced portfolio exemption was only 5%.

Last modified: 28 Jun 2007QC 27895