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Your tax return and your PIE income

When to complete a tax return

If you ... then you ... and file it by ...
already complete an IR3 return will continue to do so the usual return filing dates.*

have previously:

  • not been required to file a tax return, or
  • have received a personal tax summary (PTS)

must file an IR3 tax return if you:

  • receive zero-rated and non-excluded PIE income in excess of $200, or
  • have given a lower PIR to the PIE than your correct rate
the usual return filing dates.*

*Unless you have an extension of time to file a tax return, filing dates are:

  • the 7th of the fourth month after balance date for taxpayers with late balance dates (ie 1 April to 30 September), or
  • 7 July following the end of the tax year for other individual taxpayers.

Including PIE income from a multi-rate PIE (MRP) in your tax return

You only have to include PIE attributed income from a MRP in your tax return when it is non-excluded income

If you receive distributions from a MRP that is not a listed PIE, these are treated as excluded income and are not included in your tax return.

If ... then you ..
you have given your correct PIR to your MRP with your IRD number and your income has not been zero-rated do not need to include the PIE income in your income tax return.
you have given a rate lower than your correct PIR must include the PIE income in your tax return and pay tax based on your marginal tax rate. The PIE tax on the income will be allowed as a credit in your tax return.
you are an investor withdrawing your investment from a PIE that zero rates the income from the quarter that you exit must include the PIE income in your tax return and pay tax based on your marginal tax rate. See Note below. If it is a loss that has been zero-rated then you can claim the loss in your return.

 

Note

Any residual interest in the PIE after withdrawal will be paid to us. This amount is then allowed as a tax credit in your tax return.

If you've made a mistake with your PIR

If ... then ... and ...
you have given the MRP the wrong PIR you need to notify the MRP as soon as possible if the MRP has not performed its tax calculation for the period (quarter or annual), it may be able to adjust for the correct amount of tax.
you have given the MRP a PIR that was lower than your correct rate you will need to include all the income taxed at the lower rate or rates for the period in your tax return* a credit will be allowed for any PIE tax paid during the period.
your PIR was higher than it should have been the attributed income remains excluded income and there is no refund.  

* Although the income is no longer treated as excluded income, it will not be taken into account when determining entitlements to working for families tax credits.

Income from a PIE included in taxable income may also need to be included in family income for Working for Families Tax Credits purposes.

If the funds you have in the PIE are locked in a fund such as a KiwiSaver and similar retirement savings scheme or superannuation funds, the PIE income will not affect your Working for Families Tax Credits. Otherwise the PIE income must be included in family income and will need to be included on the Working for Families Tax Credits income adjustment form.

If the PIE income is already included in your taxable income then you do not need to show it on the adjustment form. However if your PIE income is included in your taxable income and the PIE fund is a locked-in fund then you can exclude the income for Working for Families Tax Credits using the same adjustment form.

PIE income and foreign tax credits

Where your income attributed by the MRP has been taxed at a PIR other than zero, the foreign tax credits are taken into account by the MRP when it calculates its tax liability.

Where your income attributed by the MRP has been taxed at a PIR of 0% on exit from the MRP, the foreign tax credits can be claimed in your tax return up to the amount of the tax you are required to pay on the income attributed by the MRP.

PIE income and New Zealand tax credits

Where your income attributed by the MRP has been taxed at a PIR other than zero, New Zealand tax credits are taken into account by the MRP when it calculates its tax liability.

Where your income attributed by the MRP has been taxed at a PIR of 0% on exit from the MRP, New Zealand tax credits can be claimed in your tax return. Your income tax return guide will show to what extent the New Zealand tax credits can be used.

Excess New Zealand tax credits and losses

Most MRPs that have excess New Zealand tax credits or losses in a tax calculation period receive a tax credit calculated at the individual investor's PIR.

The MRP then attributes the credit to the investor by adjusting their investor's interest in the MRP, or adjusting a distribution to the investor or a payment from the investor.

Your PIE income and provisional tax

If your PIE-attributed income is taxed at... then ... Note
a rate greater than zero and your PIE income does not need to be included in your tax return you may have a reduction in your provisional tax liability depending on the provisional tax method chosen.  
a zero rate where you have exited the PIE your exposure to a provisional tax liability may be increased. Previously distributions from your collective investment vehicle (CIV) might have attached credits that could be used against your income. Under the PIE rules those credits may no longer be available. See the example below.

 

Example of how PIE rules work for a 17.5% investor
2007 (pre-PIE) 2012 (under PIE rules)
Income received from CIV $10,000 Income received from PIE $10,000
Credits attached $ 1,500 Credits attached $ 1,500
Tax paid by CIV $ 1,800 Tax paid by PIE 17.5% $ 200.00
Investor tax due $ 3,300 Investor tax due $ 1,750
Less credits $ 3,300 Less credits and PIE tax $ 1,750
Balance due $ 0.00 Balance due $ 0.00
Net return $ 6,700 Net return $ 8,250

When is your MRP income received?

You'll need to know in which income year your MRP attributed income is received so you can determine:

  • your correct PIR
  • in which income tax return any income attributed by the MRP should be included if you’re required to return it.

PIE income is treated as being received in your income year that includes the end of the MRP’s income year. If you and the MRP have standard 31 March balance dates, the year in which the MRP attributes the income and you receive it will be the same.

If you have a balance date other than 31 March, the year the income is received may be different from the year in which the MRP attributes the income.

If you have a ... and the MRP has a ... then because the end of the MRP's 2012 income year falls ...
30 June 2012 balance date (your 2012 income year) 31 March 2012 balance date within your 2012 income year, the income is also your 2012 attributed income.
31 December 2011 balance date (your 2012 income year) 31 March 2012 balance date after the end of your 2012 income year, the income falls into your 2013 income year.

Dividends or distributions

Dividends or distributions received from an MRP are excluded income and don’t need to be included in your income tax return.

Dividends or distributions received from a PIE that is a listed company and does not use your PIR (listed PIE) won’t need to be included in your income tax return, unless you chose to include the dividend to claim imputation credits.

Note

Dividends from a listed PIE are not liable for RWT.

Transitional residents

Transitional residents will qualify for the 0% PIR if they invest in a zero-rate PIE. If you have correctly notified the 0% to the PIE, the income does not go into your tax return.

If you invest in either type of foreign investment PIE and change your residency status, you may need to included the income in your return. Find out more about investor residency changes