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Income Tax Act 2007

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

HM 61: Certain exiting investors zero-rated

You could also call this:

“Some investors in certain PIEs may have a 0% tax rate when exiting their investment”

You have a tax rate of 0% for a quarter if you’re an investor in a multi-rate PIE (a type of investment) and all of these things happen:

Your investment reaches the exit level or you have an exit period in a quarter when you get income from the PIE.

The PIE figures out and pays tax using the quarterly calculation option under section HM 43.

The PIE doesn’t choose to make voluntary payments under section HM 45.

This 0% tax rate doesn’t apply if you’re a notified foreign investor in a foreign investment PIE.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2888845.

Topics:
Money and consumer rights > Taxes
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HM 60B: Investor rates provided by Commissioner, or

“Inland Revenue can set your PIE tax rate if needed”

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HM 62: Exit levels for investors, or

“Rules for when you must leave a multi-rate PIE investment”

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

HM 61Certain exiting investors zero-rated

  1. Despite section HM 60, the tax rate applying to an investor for a quarter is 0% if—

  2. the investor interest of the investor in a multi-rate PIE reaches the exit level or the investor has an exit period in a quarter in which they are attributed income from the PIE; and
    1. the PIE calculates and pays tax using the quarterly calculation option under section HM 43; and
      1. the PIE does not choose to make voluntary payments under section HM 45.

        1. This section does not apply if the exiting investor is a notified foreign investor in a foreign investment PIE.

        Compare
        • s YA 1 portfolio investor rate, prescribed investor rate
        Notes
        • Section HM 61: 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 61: amended, on (applying for the 2010–11 and later income years), by section 51(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
        • Section HM 61(1) heading: inserted, on , by section 83(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
        • Section HM 61(1)(a): amended (with effect on 1 April 2010), on (applying for the 2010–11 and later income years), by section 100(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
        • Section HM 61(2) 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 83(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
        • Section HM 61(2): 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 83(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
        • Section HM 61 list of defined terms foreign investment PIE: inserted, on , by section 83(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
        • Section HM 61 list of defined terms notified foreign investor: inserted, on , by section 83(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
        • Section HM 61 list of defined terms quarter: inserted (with effect on 1 April 2008), on , by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).