How allocated income from the PIE can affect your tax liability
There may be tax implications if you:
- withdraw all or part of your investment, or
- change the class of the investment, or
- gift the investment.
Withdrawing all your investment
Certain PIEs have the option of paying, on your behalf, the tax relating to the income for the period in which the exit occurs. Other PIEs that are unable to calculate the tax can zero rate the income for the period.
| If ... | then ... |
|---|---|
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the PIE calculates the tax at your correct PIR |
the income does not have to be included in your tax return. |
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the PIE zero rates the income |
you must include the income in your tax return and pay the resulting tax liability. |
Withdrawing part of your investment
Certain PIEs can pay the tax for the period you withdraw your investment. If the tax calculation has been made at the correct PIR and is sufficient to meet the tax liability, the income does not have to be included in your tax return.
Changing the class of your investment
If you withdraw from a portfolio investor class and reinvest the funds in another portfolio investor class of the same PIE, then the PIE can treat the change of class as a partial withdrawal and calculate tax at that time.
Gifting your investments
| If you ... | and the PIE ... | so then you ... |
|---|---|---|
|
gift all or part of your investment, the disposition of the property may be considered a withdrawal |
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*You may also be liable to gift duty if the gift is made in New Zealand.
Date published: 11 May 2008
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