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Income Tax Act 2007

Income - Excluded income - Definitions

CX 56: Attributed income of certain investors in multi-rate PIEs

You could also call this:

“Income from certain PIE investments that may be tax-free”

This section explains when income from certain types of investments is not taxed. You don’t have to pay tax on income from a multi-rate PIE (a type of investment) if:

Your investor rate is more than zero but not higher than your notified investor rate when the PIE calculates its tax.

The rule also applies in some cases for foreign investment PIEs and for people who are new residents or leaving New Zealand.

There are some exceptions. For example, it doesn’t apply if the PIE uses a quarterly calculation method and you’re treated as having a zero rate. It also doesn’t apply if you’re a trustee who has chosen certain investor rates.

If you’re a New Zealand resident and a natural person, this rule doesn’t apply when working out adjustments to your PIE income tax.

If these conditions are met, the income from the PIE is excluded income, which means you don’t need to include it in your tax return.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513477.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
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CX 56B: Distributions to investors in multi-rate PIEs, or

“Income from multi-rate PIEs isn't taxed, except for some foreign investors”

Part C Income
Excluded income: Definitions

CX 56Attributed income of certain investors in multi-rate PIEs

  1. This section applies when an investor in a multi-rate PIE derives income attributed under section CP 1 (Attributed income of investors in multi-rate PIEs) in an income year, and—

  2. the prescribed investor rate for the investor in the relevant calculation period is more than zero; and
    1. that rate is not more than the notified investor rate in relation to the investor when the PIE calculates—
      1. its income tax liability under section HM 47 (Calculation of tax liability or tax credit of multi-rate PIEs) in relation to the income; or
        1. a voluntary payment under section HM 45 (Voluntary payments) that is intended to be a final payment of its income tax liability in relation to the income.

        2. This section also applies when a foreign investment PIE attributes income to an investor who is, for the calculation period in which the amount is attributed,—

        3. a notified foreign investor other than a person referred to in section HM 55D(6):
          1. a transitional resident who has chosen a prescribed investor rate referred to in schedule 6, table 1, row 10 (Prescribed rates: PIE investments and retirement scheme contributions):
            1. a transitional resident when the calculation period falls in the tax year in which the person becomes or ceases to be a transitional resident:
              1. an investor in the PIE when the calculation period falls in the tax year in which the person either becomes or ceases to be resident in New Zealand.

                1. When a trustee of a trust is an investor in a multi-rate PIE and an election is made in an income year (the election year) for the trust under section HC 33 (Choosing to satisfy income tax liability of trustee), this section also applies to the trustee for the income years that end before the election year and for which the election applies.

                2. This section does not apply when—

                3. the PIE calculates its income tax liability using the quarterly calculation option under section HM 43 (Quarterly calculation option) and the amount is attributed to an investor who is treated under section HM 61 (Certain exiting investors zero-rated) as zero-rated:
                  1. an amount of attributed PIE income is derived by a trustee who has chosen a prescribed investor rate referred to in schedule 6, table 1, row 5 or 7, as applicable:
                    1. a person to whom section HM 57B (Prescribed investor rates for new residents) applies chooses not to apply the section to determine their prescribed investor rate for a resident year.

                        1. This section also does not apply for the purposes of an adjustment under section HM 36B (Calculating PIE schedular adjustments for natural person investors) when a natural person who is resident in New Zealand—

                        2. is an investor in a multi-rate PIE; and
                          1. derives attributed PIE income from the PIE for an income year; and
                            1. has a rate of tax applied to their attributed PIE income that is not equal to their prescribed investor rate for the income year; and
                              1. has an amount of PIE schedular income for the income year.

                                1. The amount is excluded income of the investor.

                                Notes
                                • Section CX 56: substituted, on (applying for the 2010–11 and later income years), by section 65(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                • Section CX 56(1): amended (with effect on 1 April 2020), on , by section 22(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                • Section CX 56(1): amended, on , by section 103(1) (and see section 103(5) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                                • Section CX 56(1)(b): amended, on , by section 5(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                • Section CX 56(1B) heading: inserted, on (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 9(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                • Section CX 56(1B): inserted, on (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 9(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                • Section CX 56(1C) heading: inserted, on , by section 103(2) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                                • Section CX 56(1C): inserted, on , by section 103(2) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                                • Section CX 56(2)(b): amended, on (applying for the 2012–13 and later income years), by section 9(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                • Section CX 56(2)(b): amended, on , by section 9(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                • Section CX 56(2)(b): amended, on (applying for income years beginning on or after 1 April 2010), by section 8(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                                • Section CX 56(2)(c): inserted, on (applying for the 2012–13 and later income years), by section 9(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                • Section CX 56(2)(d): repealed (with effect on 1 April 2020), on , by section 22(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                • Section CX 56(2B) heading: inserted (with effect on 1 April 2020), on , by section 22(3) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                • Section CX 56(2B): inserted (with effect on 1 April 2020), on , by section 22(3) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                • Section CX 56 list of defined terms foreign investment PIE: inserted, on , by section 9(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                • Section CX 56 list of defined terms natural person: inserted, on , by section 103(4) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                                • Section CX 56 list of defined terms notified foreign investor: inserted, on , by section 9(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                • Section CX 56 list of defined terms notified investor rate: inserted, on , by section 5(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                • Section CX 56 list of defined terms PIE schedular income: inserted, on , by section 103(4) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                                • Section CX 56 list of defined terms resident in New Zealand: inserted, on , by section 9(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                • Section CX 56 list of defined terms tax year: inserted, on , by section 9(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                • Section CX 56 list of defined terms transitional resident: inserted, on , by section 9(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).