myIR, payments and more

Investment income
Haumi moni whiwhi

In this section

## Investment income

### Prescribed investor rate (PIR)

Work out your prescribed investor rate (PIR)

Prescribed investor rate (PIR)

Making changes to your prescribed investor rate (PIR)

Your obligations and the impact on your tax return

# Prescribed investor rate (PIR) examples

These examples will help you determine your prescribed investor rate (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 and income or loss from your multi-rate PIE made in each of the previous two income years.

If you are not a New Zealand-resident individual or a notified foreign investor you should use the 28% PIR and give your PIE your IRD number.

### I am a New Zealand-resident individual with a standard balance date of 31 March

#### Example 1

##### 1 April 2013 to 31 March 2014 and 1 April 2014 to 31 March 2015 income years
If my income year ended ... and my total taxable income ... then my PIR for the 2016 year is ...
31 March 2014 for that income year was \$35,000 with no PIE attributed income

17.5% as my taxable income was more than \$14,000 and less than \$48,001 and there was no PIE attributed income in 31 March 2014 income year.

31 March 2015

was \$47,000 plus income from investments in a PIE for that year that totalled \$25,000 ( total income \$72,000)

#### Example 2

##### 1 April 2013 to 31 March 2014 and 1 April 2014 to 31 March 2015 income years
If my income year ended... and my total taxable income... then my PIR for the 2016 year is ...
31 March 2014 for that income year was \$12,000 and there was no PIE attributed income

10.5% as my taxable income was less than \$14,001 and there was no PIE attributed income in 31 March 2014 income year.

31 March 2015 for that income year was \$47,000, and my income from investments in a PIE for that year totalled \$25,000 (total taxable income \$72,000).

#### Example 3

I have no income in either of the two previous years because I was a student or a parent returning to the workforce.

If my income year ended... and my total taxable income... then my PIR for the 2016 year would be...
31 March 2014 for that income year was \$0

10.5% as I had taxable income of \$14,000 or less in either of the two previous years.

31 March 2015 for that income year was \$0

You would also qualify for the 10.5% rate for 2017 as your 2015 income details meet the conditions for that rate for that year as well.

#### Example 4

In the current 2016 income year I have been made redundant and my total taxable income will be less than \$48,000.

If my income year ended... and my total taxable income... then my PIR for the 2016 year is ...
31 March 2014 for that income year was \$55,000

28% because I made over \$48,000 in both of the previous two income years*.

31 March 2015 for that income year was \$60,000

*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

##### 1 July 2012 to 30 June 2013 and 1 July 2013 to 30 June 2014 income years
If my income year ended... and my total taxable income and no PIE attributed income ... then my PIR for the 2016 year is ...
30 June 2013

for that income year was \$35,000

17.5% for the PIEs 2016 income year as my taxable income in one of the two previous income years was more than \$14,000 and less than \$48,001.
30 June 2014

for that income year was \$49,000

The PIE I invest in has a 31 March balance date.

I cannot use my taxable income information for the income year 1 July 2014 to 30 June 2015 as that year ends after the PIE's income year commenced (ie 1 April 2015).

#### Example 2

##### 1 January 2013 to 31 December 2013 and 1 January 2014 to 31 December 2014 income years
If my income year ended... and my total taxable income... then my PIR for the 2016 year is ...
31 December 2013

for that income year was \$49,000.

28% as my taxable income was greater than:

• \$48,000 in the first year, and
• \$70,000 when combined with my PIE-attributed income in the second year.
31 December 2014 is \$45,000, plus \$26,000 income from my investments in a PIE during that income year

If my PIE's income year commences on or after 1 April 2015, I would give them my 28% PIR for the 2016 tax year.

### New Zealand resident companies

If I am a company registered in New Zealand... then the PIR is...
that invests in a PIE 0%.

### New Zealand resident trustees

If I am a trustee of a trust... then my PIR is... Note
with two beneficiaries

either 0%, 17.5% or 28%.

You can choose the one that best suits the beneficiaries of the trust.

If the trust is a testamentary trust (generally a trust that is created under the terms of a will), you also have the choice of 10.5%.

### Non-residents of New Zealand

This covers all types of non-resident entities, individuals, companies, trusts etc.

If I have invested in a ... then my PIR is...
PIE but I am not a resident of New Zealand for tax purposes

28%.

foreign investment zero-rate PIE and qualify as a notified foreign investor

0%.

foreign investment variable-rate PIE as a notified foreign investor

variable rates based on the source and type of income.

Find out more about variable PIRs

You should advise your PIE that you are a non-resident.

### New residents of New Zealand

##### Example

Dave becomes a New Zealand resident on 1 May 2014. He earned \$100,000 for the 2013 and 2014 tax years from employment in his previous country. However his qualifications are not recognised in New Zealand so he is unable to find similar paid employment.

Dave chooses to determine his PIR excluding his non-New Zealand-sourced income which could see him on the 10.5% rate.

By making this choice the income will not be excluded income and must be included in his New Zealand tax return. This could then see the income taxed at the top personal income tax rate of 33%.