Plain language law

New Zealand law explained for everyone

 Plain Language Law homepage
Back to
HM 32: Rules for and treatment of investors in multi-rate PIEs
or “How to pay tax on your multi-rate PIE investments”
You could also call this:

“How to represent a PIE investor and manage their investment”

You can become a proxy for an investor in a multi-rate PIE (Portfolio Investment Entity) for a certain period if you hold an investment for them and tell the PIE that you’re acting as a proxy.

As a proxy, you need to act as if you were a multi-rate PIE. You must treat the investor’s investment as if it were their share in your income. If it’s a foreign investment PIE and the investor is a notified foreign investor, you need to treat them as if they were investing directly in you.

Your job as a proxy includes:

  1. Giving the right amounts to the investor for that period
  2. Giving out money and credits to the investor
  3. Paying income tax on the investment income
  4. Changing the investor’s share or payments if needed, as said in section HM 48
  5. If it’s a foreign investment PIE, getting information from foreign investors and helping the PIE with its foreign investors
  6. Giving tax returns to the government as required by section 57B of the Tax Administration Act 1994
  7. Giving the investor a notice as required by section 31C of that Act
  8. Telling the PIE about the investor and their investment to make sure they meet the PIE’s rules

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 It might be out of date or be missing some parts.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

Next up: HM 34: Attribution periods

or “Choosing how often a multi-rate PIE assigns amounts to investors”
Next

Part H Taxation of certain entities
Portfolio investment entities: Introductory provisions

HM 33Proxies for PIE investors

  1. An entity may become a proxy for an investor in a multi-rate PIE for an attribution period if the entity—

  2. holds an investor interest for the investor; and
    1. notifies the PIE that it holds the interest as proxy.

      1. The proxy must perform the duties set out in subsection (3) in relation to amounts attributed to them for the period as holder of the interest as if—

      2. the proxy were a multi-rate PIE; and
        1. the investor interest were an interest of the investor in the income of the proxy; and
          1. for a foreign investment PIE and a notified foreign investor, the investor were a notified foreign investor in the proxy; and
            1. the amounts attributed and distributions received by the proxy were amounts of the proxy to which the investor is entitled as holder of the interest.

              1. The proxy’s duties are to—

              2. attribute amounts to the investor for the period; and
                1. distribute amounts and credits to the investor for the period; and
                  1. pay income tax on the investment income for the period; and
                    1. adjust the investor interest of the investor or distributions to the investor under section HM 48; and
                      1. for a foreign investment PIE, collect information required from the notified foreign investors and act generally on behalf of the PIE in relation to its notified foreign investors; and
                        1. provide returns as required under section 57B of the Tax Administration Act 1994 to the Commissioner and any other information required by the Commissioner; and
                          1. provide the investor with a notice under section 31C of that Act; and
                            1. provide the PIE with information about the investor and investor interest that may be relevant to any eligibility requirements of the PIE.

                              Notes
                              • Section HM 33: 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 33(2)(bb): inserted, 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 68(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                              • Section HM 33(3)(db): inserted, 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 68(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                              • Section HM 33 list of defined terms foreign investment PIE: inserted, on , by section 68(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                              • Section HM 33 list of defined terms notice: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                              • Section HM 33 list of defined terms notified foreign investor: inserted, on , by section 68(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).