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LS 2: Tax credits for investors in multi-rate PIEs
or “Investors in certain funds can receive tax credits to offset their income tax”
You could also call this:

“Tax credits available for zero-rated investors with multi-rate PIE income”

You can get tax credits if you’re a zero-rated investor and you have income from a multi-rate PIE in a tax year. These credits can help you pay your income tax.

You get a tax credit equal to the amount of income tax the PIE paid for your attributed income in that tax year.

You also get a tax credit for foreign income tax paid by the PIE. The amount is worked out using section HM 52.

There’s another tax credit you can get for tax paid or withheld. This amount is worked out using section HM 54.

You get these tax credits for the tax year that matches the income year when the PIE’s tax year ends.

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Next up: LS 4: Tax credits for certain exiting investors

or “Tax credits for investors leaving certain investment funds”
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Part L Tax credits and other credits
Tax credits for multi-rate PIEs and investors

LS 3Tax credits for zero-rated investors

  1. This section applies when a zero-rated investor has attributed PIE income from a multi-rate PIE for a tax year.

  2. The investor has a tax credit that may be used to satisfy their income tax liability for the tax year equal to the amount of income tax liability satisfied by the PIE for the attributed income for the tax year.

  3. A zero-rated investor also has a tax credit for the tax year for the amount determined under section HM 52 (Use of foreign tax credits by zero-rated investors) for foreign income tax paid by the PIE.

  4. A zero-rated investor also has a tax credit for the tax year for the amount determined under section HM 54 (Use of tax credits other than foreign tax credits by investors) for tax paid or withheld.

  5. The investor has the tax credit for the tax year corresponding to the income year in which the PIE's tax year ends.

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Notes
  • Section LS 3: 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 3(2): amended (with effect on 1 April 2010), on (applying for the 2010–11 and later income years), by section 93(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
  • Section LS 3(3): amended (with effect on 1 April 2020), on , by section 118 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).