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Attributed 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 31 May or 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.
the PIE is a retirement savings scheme or super fund such as a KiwiSaver scheme by 30 June.
you invest in other PIE funds where the contributions are not locked in until retirement by 31 May.

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 (known as listed PIEs) that are not multi-rate PIEs (MRP) may send a dividend statement to their investors.

Excluded and non-excluded income

Excluded income is income attributed by the PIE that does not need to be included in your tax return.

Non-excluded income is income attributed by the PIE that must be included in your tax return.

If the trustees have:

  • chosen either 0%, 10.5%, 17.5%, or
  • had the default rate applied as the PIR for the trust.

The income attributed by the PIE will not be excluded income and will need to be included in the trust's return of income. If the 10.5% or 17.5% rates are notified and the PIE attributes a loss to the trust, the PIE tax is final and the loss is not included in the return.

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 and not an multi-rate PIE (MRP) the resident trustee can choose to include dividends paid in their income tax return.
not listed on the New Zealand stock exchange or chosen to be a multi-rate PIE (MRP) 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 28%, we will not send you anything relating to the income from the trust's PIE. However if you or the beneficiaries file an income tax return which includes non-excluded income attributed by the PIE, we may acknowledge the return.

How other entitlements and obligations are affected by attributed income from a PIE

Beneficiaries' Working for Families Tax Credits

Previously all income from a multi-rate PIE you invest in did not affect beneficiaries' entitlements to Working for Families Tax Credits unless:

  • the distribution or dividend is from a listed PIE, and
  • and the resident trustee has included the income in the trust's tax return and attributed PIE income to the beneficiaries.

For the 2012 tax year income from a PIE that is not a retirement savings scheme or super fund that the trustee treats as beneficiary income will affect the beneficiary’s entitlement to Working for Families Tax Credits. This also includes PIE income for the children of the person entitled to the tax credit as it forms part of the family scheme income for the parent of the beneficiary. 

Even if the PIE income is treated as trustee income it can still need to be included for Working for Families Tax Credit purposes, especially if the trust is a family trust and the principle caregiver or spouse is a settlor of the trust.

Beneficiaries' student loan repayment obligations

If the attributed 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.

From 1 April 2014 if the PIE investment is not in a PIE that is a superannuation fund or retirement saving scheme, the attributed PIE income if treated as beneficiary income will need to be included for student loan repayment obligation calculation purposes.

If the trust makes a distribution that is not beneficiary income to a borrower who is not a settlor of the trust, the distribution may become part of the income for student loans purposes.

If the PIE is a superannuation fund or a retirement savings scheme and the income is included as beneficiary income for a borrower then the PIE income can be excluded from adjusted net income for student loan purposes.

Beneficiaries' child support payment obligations

If the attributed 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.

Representation by PIE investor proxy

If the trust is represented by a PIE 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: 12 Mar 2014

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