Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Tax credits and other credits - Tax credits for multi-rate PIEs and investors

LS 4: Tax credits for certain exiting investors

You could also call this:

“Tax credits for investors leaving certain investment funds”

When you leave a multi-rate PIE (a type of investment), you might get some tax credits. These credits can help you pay your income tax for the year you left the PIE.

If you’re treated as zero-rated when you leave, and you had income from the PIE in the tax year you left, you can get a tax credit. This credit is equal to any money the PIE paid to the tax department for you after you left.

You can also get a tax credit for any tax the PIE paid or withheld for you. This is worked out using a special calculation in section HM 54.

If you’re a person who lives in New Zealand, and you have a tax credit available, it will be used to adjust your income tax in a special way. This adjustment is calculated using section HM 36B.

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

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518358.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
Previous

LS 3: Tax credits for zero-rated investors, or

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

Next

LT 1: Tax credits for petroleum miners, or

“Tax credits available for petroleum miners with losses from stopping operations or well abandonment”

Part L Tax credits and other credits
Tax credits for multi-rate PIEs and investors

LS 4Tax credits for certain exiting investors

  1. This section applies when an exiting investor in a multi-rate PIE who is treated under section HM 61 (Certain exiting investors zero-rated) as zero-rated has attributed PIE income from the PIE for a tax year in which the exit period falls.

  2. The investor has a tax credit that may be used to satisfy their income tax liability for the tax year equal to any amount paid by the PIE under section HM 43(4) (Quarterly calculation option) to the Commissioner after the investor exits from the PIE for the residual value of the investor interest of the investor.

  3. Repealed

  4. An exiting 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. Despite subsections (2) and (4), when an exiting investor who is a natural person resident in New Zealand has an available tax credit, the amount must be taken into account in an adjustment under section HM 36B (Calculating PIE schedular income adjustments for natural person investors) for the purposes of calculating the income tax liability of the person.

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

Compare
Notes
  • Section LS 4: 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 4(2): amended (with effect on 1 April 2010), on , by section 110 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
  • Section LS 4(3) heading: repealed (with effect on 1 April 2020), on , pursuant to section 119(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section LS 4(3): repealed (with effect on 1 April 2020), on , by section 119(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section LS 4(4B) heading: inserted (with effect on 1 April 2020), on , by section 119(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section LS 4(4B): inserted (with effect on 1 April 2020), on , by section 119(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section LS 4 list of defined terms foreign income tax: repealed (with effect on 1 April 2020), on , by section 119(3)(a) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section LS 4 list of defined terms natural person: inserted (with effect on 1 April 2020), on , by section 119(3)(b) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section LS 4 list of defined terms resident in New Zealand: inserted (with effect on 1 April 2020), on , by section 119(3)(b) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).