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Income Tax Act 2007

Deductions - Specific rules for expenditure types

DB 53: Attributed PIE losses of certain investors

You could also call this:

“Deductions for specific losses from multi-rate PIEs”

You can get a deduction for certain losses from a multi-rate PIE (Portfolio Investment Entity). This applies when:

  1. The PIE attributes a loss to you for a period in a tax year, and
  2. You are either a zero-rated investor, or the PIE uses quarterly calculations and you’re leaving the PIE.

You can claim this deduction in the income year when the PIE’s tax year ends.

This rule also applies if you’re a New Zealand resident and a natural person investing in a multi-rate PIE. If the tax rate used for your attributed amount isn’t the same as your prescribed investor rate for that year, and you have an attributed PIE loss, you may be able to make an adjustment.

This section adds to the general permission for deductions, but the general limitations still apply.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513736.

Topics:
Money and consumer rights > Taxes
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DB 54: No deductions for fees relating to interests in multi-rate PIEs, or

“You can't claim tax deductions for fees paid to multi-rate PIE investment funds”

Part D Deductions
Specific rules for expenditure types

DB 53Attributed PIE losses of certain investors

  1. This section applies to an investor in a multi-rate PIE when—

  2. an amount of attributed PIE loss is attributed under section HM 36 (Calculating amounts attributed to investors) to an investor for an attribution period in a tax year; and
    1. either—
      1. the investor is a zero-rated investor; or
        1. the PIE calculates its tax liability using the quarterly calculation option under section HM 43 and the amount is attributed to an exiting investor to whom section HM 61 applies.

        2. The investor is allowed a deduction for the amount allocated to the investor's income year in which the PIE's tax year ends.

        3. This section also applies 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—

        4. is an investor in a multi-rate PIE; and
          1. in relation to an amount attributed to them by the PIE, has a rate of tax applied that is not equal to their prescribed investor rate for the income year; and
            1. has an amount of attributed PIE loss for the income year.

              1. This section supplements the general permission. The general limitations still apply.

              Compare
              Notes
              • Section DB 53: substituted, on (applying for the 2010–11 and later income years), by section 77(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
              • Section DB 53(1)(b): replaced (with effect on 1 April 2020), on , by section 37(1) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
              • Section DB 53(2B) heading: inserted (with effect on 1 April 2020), on , by section 31(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
              • Section DB 53(2B): inserted (with effect on 1 April 2020), on , by section 31(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
              • Section DB 53 list of defined terms natural person: inserted (with effect on 1 April 2020), on , by section 31(3)(b) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
              • Section DB 53 list of defined terms prescribed investor rate: inserted (with effect on 1 April 2020), on , by section 31(3)(b) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
              • Section DB 53 list of defined terms resident in New Zealand: inserted (with effect on 1 April 2020), on , by section 31(3)(b) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
              • Section DB 53 list of defined terms zero-rated investor: inserted (with effect on 1 April 2020), on , by section 37(2) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
              • Section DB 53 list of defined terms zero-rated portfolio investor: repealed (with effect on 1 April 2020), on , by section 31(3)(a) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).