Prescribed investor rate (PIR) examples
These examples will help you determine your PIR.
If you are a New Zealand-resident individual who has also provided your IRD number, when determining your:
- PIR, you should refer to your taxable income made in each of the previous two income years.
- total taxable income for income years starting on or after 1 April 2008 you will need to include any income made on your investments with a PIE.
If you are not a New Zealand-resident individual you should apply the PIR that applies to you and give the PIE your IRD number.
I am a New Zealand-resident individual with a standard balance date
Example 1
2006-2007 and 2007-2008 income years
| My income year ended ... | and my total taxable income ... | so my PIR for the 2009 year ... |
|---|---|---|
| 31 March 2007 | for that income year was $35,000. | |
| 31 March 2008 | was $37,000, and my income from investments in a PIE for that year totalled $25,000. My total income for that year is: $62,000 ($37,000 + $25,000). |
would be 19.5% as my taxable income was $38,000 or less in one of the two previous years (2006-2007 income year). |
Note
As the PIE rules commence from 1 October 2007, there is no 2007 income from your PIE.
Example 2
2007-2008 and 2008-2009 income years
| My income year ended... | and my total taxable income... | so my PIR for the 2010 year... |
|---|---|---|
| 31 March 2008 | for that income year was $38,100. |
|
| 31 March 2009 | for that income year was $39,000, and my income from investments in a PIE for that year totalled $15,000. My total taxable income for that year is: $54,000 ($39,000 + $15,000). |
would be 30% as my taxable income was greater than $38,000 in both of the two previous years. |
Example 3
I have no income in either of the two previous years because I was a student or a new arrival in New Zealand or a parent returning to the workforce.
| My income year ended... | and my total taxable income... | so my PIR for the 2010 year... |
|---|---|---|
| 31 March 2008 | for that income year was $0. |
|
| 31 March 2009 | for that income year was $0 | would be 19.5% as I had taxable income of $38,000 or less in either of the two previous years. |
Example 4
In the current 2009 year I have been made redundant and my total taxable income will be less than $38,000.
| My income year ended... | and my total taxable income... | so my PIR for the 2009 year... |
|---|---|---|
| 31 March 2007 | for that income year was $45,000. |
|
| 31 March 2008 | for that income year was $40,000 | would be 30% because I made over $38,000 in both of the previous two income years*. |
*Income made in the current year is not taken into consideration when determining your PIR.
I am a New Zealand resident with a non-standard balance date
Example 1
2005-2006 and 2006-2007 income years
| My income year ended... | and my total taxable income... | so my PIR for the 2009 year... |
|---|---|---|
| 30 June 2006 |
for that income year was $35,000.
|
|
| 30 June 2007 |
was $39,000
|
would be 19.5% as my taxable income in one of the two previous years was $38,000 or less. |
Note
As the PIE rules commence from 1 October 2007 there is no 2006 or 2007 income from my PIE.
The PIE I invest in has a 31 March balance date.
I cannot use my taxable income information for the income year 1 July 2007 to 30 June 2008 as that year ends after the PIE's income year commenced (ie 1 April 2008).
Example 2
2007-2008 and 2008-2009 income years
| My income year ended... | and my total taxable income... | so my PIR for the 2010 year... |
|---|---|---|
| 31 December 2007 |
for that income year was $40,000.
|
|
| 31 December 2008 | is $35,000, plus $26,000 income from my investments in a PIE during that income year | would be 30% as my taxable income was greater than $38,000 in the first year and greater than $60,000 when combined with my PIE-allocated income in the second year. |
Note
The PIE I invest in has a 31 March balance date. My information about my total taxable income is for the two years before the PIE's income year commenced, ie 1 April 2009.
There is no 2008 allocated income from my PIE as the PIE's 2008 income year ended after the end of my 2008 income year (1 January 2007 to 31 December 2007) and therefore falls in my 2009 income year.
As the end of the PIE's 2009 year falls after the end of my 2009 income year, the income allocated to me from my PIE arises in the 2010 year (1 January 2009 to 31 December 2009).
New Zealand resident companies
| I am a company registered in New Zealand... | so the PIR is... |
|---|---|
| that invests in a PIE | 0%. |
Non-resident of New Zealand
| I have... | so my PIR is... |
|---|---|
| investments in a PIE, but I am not a resident of New Zealand for tax purposes |
30%.
|
Note
You should advise your PIE that you are a non-resident.
New Zealand resident trustees
| I am a trustee of a trust... | so my PIR is... |
|---|---|
| with say two beneficiaries |
either 0%, 19.5% or 30%. You can choose the one that best suits the beneficiaries of the trust. |
Find out more
Date published: 10 Nov 2009
Back to top
