What is a PIE?

Introduction

A portfolio investment entity (PIE) is a new type of entity, such as a managed fund that invests the contributions from investors in different types of investments.

New tax rules have allowed eligible entities to become PIEs from 1 October 2007.

Eligible entities that elect to become a PIE will generally pay tax on investment income based on the prescribed investor rate (PIR) of their investors, rather than at the entity's tax rate. However, the PIR for non-residents is 30%.

Income earned through a PIE will generally not affect investors' student loan or child support obligations.

Eligible entities

Entities that meet the eligibility requirements can elect to become a PIE if they are a:

• managed fund, such as a:
  • unit trust, or
  • superannuation fund
• company
• benefit fund
• life fund, or
• group investment fund.

To find out more about the types of PIEs, please read Portfolio investment entities (PIE).

Investing in a PIE

We cannot comment or provide advice on investment schemes. However, the information here should help you particularly in relation to non-resident withholding tax (NRWT). You should also talk to your tax agent or financial adviser.

Record-keeping requirements

There are no record-keeping requirements for excluded income.

If the PIE income is not excluded income:

• because it been taxed at a zero rate, or
• you have given the PIE a rate lower than your correct rate

then you must keep your records relating to that income for seven years.

For more help

• For a full explanation of the new PIE rules please read:
  
  
• Tax rules for portfolio investment entities
• New tax rules for portfolio investment in shares.
• Remedial amendments to the portfolio investment entity tax rules.

Date published: 23 Feb 2010

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