Plain language law

New Zealand law explained for everyone

 Plain Language Law homepage
Back to
HM 55H: Treatment when certain requirements for foreign investment PIEs not met
or “Rules for foreign investment PIEs that don't meet certain requirements”
You could also call this:

“How the government sets tax rates for certain investments”

When you invest in a multi-rate PIE (a type of investment), the government sets a rate for how much tax you need to pay. This rate is called your prescribed investor rate. You can find out what your rate is by looking at schedule 6, tables 1 and 1B.

If you’re a trustee (someone who manages money for others), there’s a special rule about how to work out your prescribed investor rate. Sometimes, trustees can choose to pay tax on the trust’s income themselves. If they make this choice after the start of the income year, but it applies from the beginning of that year or earlier, the extra income from this choice isn’t counted when working out the trustee’s prescribed investor rate.

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 It might be out of date or be missing some parts.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 57: Prescribed investor rates for certain investors: 0%

or “Some investors in multi-rate PIEs pay 0% tax on their investment income”
Next

Part H Taxation of certain entities
Portfolio investment entities: Prescribed and notified rates for investors in multi-rate PIEs

HM 56Prescribed investor rates: schedular rates

  1. The prescribed investor rate of an investor in a multi-rate PIE is determined under schedule 6, tables 1 and 1B (Prescribed rates: PIE investments and retirement scheme contributions).

  2. Repealed

  3. In the determination of a trustee’s prescribed investor rate under subsection (1), the amount of the trustee’s assessed taxable income for an income year is treated as not including the amount of an increase in the assessed taxable income that results from an election under section HC 33 (Choosing to satisfy income tax liability of trustee), if the election is made after the beginning of the income year and has an effective date that is or precedes the beginning of the income year.

Notes
  • Section HM 56: substituted, on (applying for the 2010–11 and later income years), by section 49(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
  • Section HM 56(1) heading: inserted (with effect on 1 April 2010), on (applying for the 2010–11 and later income years), by section 80(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
  • Section HM 56(1): amended, on , by section 80(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
  • Section HM 56(2) heading: repealed, on , pursuant to section 93 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section HM 56(2): repealed, on , by section 93 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section HM 56(3) heading: inserted, on , by section 150 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
  • Section HM 56(3): inserted, on , by section 150 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
  • Section HM 56 list of defined terms amount: inserted (with effect on 1 April 2010), on (applying for the 2010–11 and later income years), by section 80(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
  • Section HM 56 list of defined terms notified investor rate: inserted (with effect on 1 April 2010), on (applying for the 2010–11 and later income years), by section 80(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
  • Section HM 56 list of defined terms taxable income: added (with effect on 1 April 2010), on (applying for the 2010–11 and later income years), by section 80(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).