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HM 1: Outline of subpart and relationship with other Parts
or “This section explains PIEs and their rules in the Income Tax Act”
You could also call this:

“A portfolio investment entity is a company or fund that invests money for others and follows specific rules”

A portfolio investment entity (PIE) is a company or fund that invests money for one or more people. To be a PIE, the company or fund must follow certain rules and tell the government that it wants to be a PIE.

When a company or fund becomes a PIE, it has to be one of these types:

  • A multi-rate PIE
  • A listed PIE
  • A benefit fund PIE
  • A life fund PIE
  • A foreign investment PIE (which can be either a zero-rate or variable-rate PIE)

If a company or fund chooses to be a listed PIE, it can also decide to be a multi-rate PIE if it follows the rules in sections HM 7 to HM 20.

The rules for multi-rate PIEs also apply to foreign investment PIEs, unless a rule says something different.

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Next up: HM 3: Foreign PIE equivalents

or “Rules for overseas investment entities similar to PIEs”
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Part H Taxation of certain entities
Portfolio investment entities: Introductory provisions

HM 2What is a portfolio investment entity?

  1. A portfolio investment entity (a PIE) is a company or fund that—

  2. makes investments on behalf of 1 or more investors in the entity or in an investor class of the entity; and
    1. meets and maintains the requirements for PIE status; and
      1. chooses to become a PIE by notifying the Commissioner.

        1. An entity that chooses to become a PIE must be 1 of the following types of entity:

        2. a multi-rate PIE:
          1. a listed PIE:
            1. a benefit fund PIE:
              1. a life fund PIE:
                1. a foreign investment PIE that is either a foreign investment zero-rate PIE or a foreign investment variable-rate PIE.

                  1. Despite subsection (2), an entity that chooses to become a listed PIE may choose to become a multi-rate PIE if it meets the requirements of the entry rules set out in sections HM 7 to HM 20.

                  2. The provisions of the PIE rules as they relate to multi-rate PIEs apply in the same manner to foreign investment PIEs, unless a provision expressly states otherwise.

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                    Notes
                    • Section HM 2: inserted, on (applying for the 2010–11 and later income years), by section 292(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section HM 2(2)(d): amended, 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 52(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                    • Section HM 2(2)(e): added, 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 52(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                    • Section HM 2(3): amended (with effect on 1 April 2010), on , by section 217 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                    • Section HM 2(4) heading: added, 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 52(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                    • Section HM 2(4): added, 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 52(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                    • Section HM 2 list of defined terms foreign investment PIE: inserted, on , by section 52(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                    • Section HM 2 list of defined terms foreign investment variable-rate PIE: inserted, on , by section 52(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                    • Section HM 2 list of defined terms foreign investment zero-rate PIE: inserted, on , by section 52(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).