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LS 1: Tax credits for multi-rate PIEs
or “Tax credits available for certain multi-rate PIEs and their investors”
You could also call this:

“Investors in certain funds can receive tax credits to offset their income tax”

You can get tax credits if you invest in a multi-rate PIE (Portfolio Investment Entity). This applies when you have income from a multi-rate PIE in a tax year. Your prescribed investor rate needs to be more than zero. If you’re a trustee, your rate is set out in the schedule for PIE investments and retirement scheme contributions.

The income from the PIE can’t be excluded income. This means it must meet certain conditions set out in the law.

You get the tax credit in the income year when the PIE’s tax year ends. The amount of the credit is the same as the income tax the PIE paid on your behalf. You can use this credit to pay your income tax for that tax year.

However, if you’re a natural person investor and the tax credit is used to calculate an adjustment for PIE schedular income, you can’t use that credit for anything else.

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Next up: LS 3: Tax credits for zero-rated investors

or “Tax credits available for zero-rated investors with multi-rate PIE income”
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Part L Tax credits and other credits
Tax credits for multi-rate PIEs and investors

LS 2Tax credits for investors in multi-rate PIEs

  1. This section applies when—

  2. an investor has attributed PIE income from a multi-rate PIE for a tax year; and
    1. the investor's prescribed investor rate is—
      1. more than zero:
        1. for an investor who is a trustee, the rate set out in schedule 6, table 1, row 5 or 7 (Prescribed rates: PIE investments and retirement scheme contributions), as applicable; and
        2. the income is not excluded income of the investor because—
          1. the test in section CX 56(1)(b) (Attributed income of certain investors in multi-rate PIEs) is not met; or
            1. section CX 56(2)(b), (c), or (d) applies.

            2. The investor has a tax credit for the income year in which the PIE's tax year ends. The amount of the credit is equal to the amount of income tax liability satisfied by the PIE in relation to the attributed PIE income, and may be used to satisfy the investor's income tax liability for the tax year.

            3. Despite subsection (2), when the amount of an investor’s tax credit is taken into account in calculating an adjustment for PIE schedular income under section HM 36B (Calculating PIE schedular income adjustments for natural person investors), the amount of the credit is extinguished for any other purpose.

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            Notes
            • Section LS 2: substituted, on (applying for the 2010–11 and later income years), by section 348(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
            • Section LS 2(1): substituted (with effect on 1 April 2009), on , by section 347(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
            • Section LS 2(1)(a): amended, on , by section 347(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
            • Section LS 2(1)(b)(ii): amended, on (applying for income years beginning on or after 1 April 2010), by section 83(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
            • Section LS 2(1)(c): substituted (with effect on 1 April 2010), on (applying for the 2010–11 and later income years), by section 106(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
            • Section LS 2(1)(c)(ii): amended, on , by section 161(1) (and see section 161(4) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
            • Section LS 2(2): amended (with effect on 1 April 2010), on (applying for the 2010–11 and later income years), by section 91(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
            • Section LS 2(3) heading: inserted, on , by section 161(2) (and see section 161(4) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
            • Section LS 2(3): inserted, on , by section 161(2) (and see section 161(4) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
            • Section LS 2 list of defined terms pay: repealed (with effect on 1 April 2010), on , by section 91(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
            • Section LS 2 list of defined terms PIE schedular income: inserted, on , by section 161(3) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).