Allocated income from a PIE
About your PIE
There are some facts you will need to know about the trust's PIE to help you with your tax responsibilities.
When the PIE sends you your income tax details
Generally PIEs need to provide you with the information on an investment statement by 30 June following the tax year. However, there are some exceptions.
| If ... | then the PIE needs to provide the information ... |
|---|---|
| the PIE files quarterly, and zero-rates their exiting investors | within one month of the end of the quarter in which the investor exited. |
| you are a zero-rated investor, ie applied a 0% PIR | by the end of the month following the end of the tax year. |
If you don't get any details from your PIE or you think the investor statement is wrong, then you need to contact your PIE.
PIEs listed on the New Zealand stock exchange may send a dividend statement to their investors.
Excluded and non-excluded income
Excluded income is income allocated by the PIE that does not need to be included in your tax return.
Non-excluded income is income allocated by the PIE that must be included in your tax return.
If the trustees have:
- chosen either 0% or 19.5%, or
- had the default rate applied as the PIR for the trust
the income allocated by the PIE will not be excluded income and will need to be included in the trust's return of income.
Distributions made by a PIE
| If the PIE is ... | then ... |
|---|---|
| listed on the New Zealand stock exchange or intends to be listed within two years | the resident trustee can choose to include dividends paid in their income tax return. |
| not listed on the New Zealand stock exchange | distributions made do not have to be included as income in the trust's tax return. |
PIE income and Inland Revenue
PIEs that calculate tax based on their investors' PIR, forward investor income details to us when they file their annual reconciliation.
If you as the trustee chose a PIR of 30%, we will not send you anything relating to the income from the trust's PIE. However if you or the beneficaries file an income tax return which includes non-excluded income allocated by the PIE, we will acknowledge the return.
How other entitlements and obligations are affected by allocated income from a PIE
Beneficiaries' working for families tax credits
Generally excluded income from the PIE you invest in does not affect beneficiaries' entitlements to working for families tax credits unless:
- the distribution or dividend is from a PIE listed on the New Zealand stock exchange, and
- and the resident trustee has included the income in the trust's tax return and allocated PIE income to the beneficiaries.
Beneficiaries' student loan repayment obligations
| If the allocated income from a PIE is ... | then it ... |
|---|---|
| excluded income | is not taken into account when determining student loan repayments. |
| non-excluded income | will be taken into account in determining student loan repayments. |
Beneficiaries' child support payment obligations
| If the allocated income from a PIE is ... | then it ... |
|---|---|
| excluded income | is generally not taken into account when determining child support payments. |
| non-excluded income | will be taken into account in determining child support payments. |
Ceasing your investments
If you want to cease your investment, you should contact your PIE to find out what is required, and whether there will be any costs involved.
You do not have to tell us if you exit the PIE.
Investments held at the time of death
Investments held at the time of death will pass to the estate. The transfer to the estate is considered to be an exit and the PIE may zero rate the income in the period to the date of death. The zero-rated allocated income from the PIE will have to be included in the tax return to the date of death.
If the investments are not distributed to the beneficiaries but continue to be held in the estate, the resident executor can choose whether to advise the PIE of 30%, 19.5% or 0% as the PIR.
Representation by portfolio investor proxy
If the trust is represented by a portfolio investor proxy and then ceases to be, the proxy's obligations will pass directly to the PIE that holds your investment. The resident trustee should give the PIE the chosen PIR and the trust's IRD number.
Date published: 10 Nov 2009
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