Entities must meet certain criteria to become a portfolio investment entity (PIE). There may be exceptions and variance to these requirements. Detailed requirements are in our PIE guide.
Requirements for an MRP
- At least 90% of the entity’s income must be passive.
- Investor interests must give the same rights to entity income.
- The PIE must adjust members’ accounts to reflect their notified or prescribed investor rate.
Requirements for a listed PIE
- At least 90% of the entity’s income must be passive.
- Be or about to be listed on a recognised stock exchange in New Zealand.
- Have only one investment class.
- Investor interests must give the same rights to entity income.
- Full imputation credit.
Requirements for a benefit fund and life fund PIE
- At least 90% of the entity’s income must be passive.
Requirements for a land PIE
- At least 90% of the entity’s income must be passive.
- Hold more than 50% of its investments in land or land holding companies.
- Land losses can only be offset against income from that same land class.
General requirements for all PIEs
- Entities must be New Zealand residents.
- Entities must be a company, trust or superannuation scheme.
- Entities cannot have ceased to be a PIE in the last 5 years.
- PIEs other than Listed must have investor classes which include at least 20 investors or have a specified investor such as another PIE.
- An investor generally cannot hold more than 20% of investor interests in a class.
- PIEs generally should not hold more than 20% of voting or value interests in a company or investor class.
At least 90% of the entity’s asset value must be:
- an interest in land
- a financial arrangement
- an excepted financial arrangement
- a right or option concerning these investment types.
At least 90% of entity income must be derived from property under the requirements above or consist of:
- dividends
- replacement payments
- income treated under the financial arrangement rules as derived by the entity
- income under a lease of land
- proceeds from the disposal of property noted above
- foreign investment fund income
- income attributed from another PIE
- distributions from superannuation funds
- management fee rebates.
