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Income Tax Act 2007

Taxation of certain entities - Portfolio investment entities - Exit levels and periods

HM 62: Exit levels for investors

You could also call this:

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

When you invest in a multi-rate PIE, you reach the exit level when the PIE’s tax responsibility for you is the same as or more than the value of your investment in the PIE at the end of the exit period.

You also reach the exit level if you don’t give your tax file number to the PIE by the date set out in section 28B of the Tax Administration Act 1994.

If you don’t provide your tax file number by the required date, your account is treated as closed on that date. The PIE must pay you the remaining balance of your investment. They will also calculate and pay tax for you for the exit period using the exit calculation option under section HM 42.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2888848.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
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HM 61: Certain exiting investors zero-rated, or

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

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HM 63: Exit periods, or

“When an investor's stake in a multi-rate PIE investment ends”

Part H Taxation of certain entities
Portfolio investment entities: Exit levels and periods

HM 62Exit levels for investors

  1. An investor in a multi-rate PIE is treated as reaching the exit level when the PIE’s tax liability for the investor is equal to, or more than, the value of the investor interest of the investor in the PIE at the end of the exit period (the exit level).

  2. An investor in a multi-rate PIE is treated as reaching the exit level when they fail to provide a tax file number to the PIE by the date set out in section 28B of the Tax Administration Act 1994.

  3. The account of an investor to whom subsection (2) applies is treated as closed on the date referred to in that subsection. The PIE must pay the amount that is the balance of the investor’s investment to the investor, and calculate and pay tax for the exiting investor for the exit period using the exit calculation option under section HM 42.

Notes
  • Section HM 62: 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 62(1) heading: inserted, on , by section 132(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 62(1): amended (with effect on 1 April 2010) on (applying for the 2010–11 and later income years), by section 101(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
  • Section HM 62(2) heading: inserted, on , by section 132(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 62(2): inserted, on , by section 132(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 62(3) heading: inserted, on , by section 132(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 62(3): inserted, on , by section 132(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 62 list of defined terms amount: inserted, on , by section 132(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 62 list of defined terms tax file number: inserted, on , by section 132(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).