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.

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
• defined benefit fund
• portfolio investment-linked 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. You should talk to your tax agent or financial adviser.

Record-keeping requirements

If your PIE income is taxed at the correct PIR and does not have to be included in your tax return, you don't have to keep records.

If the PIE income has been taxed at a zero rate or if you as a partner/holder have given the PIE a PIR lower than your actual 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: 29 Jul 2008

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