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HM 36: Calculating amounts attributed to investors
or “How your share of a PIE's income or loss is calculated”
You could also call this:

“How tax changes are calculated for people investing in multi-rate PIEs”

This section explains how to work out tax changes for people who invest in a special kind of fund called a multi-rate PIE. Here’s what you need to know:

You might need to adjust your tax if you’re a New Zealand resident who invests in a multi-rate PIE. This doesn’t apply if you get PIE income from a trust that isn’t a PIE.

The tax office will check if the right tax rate was used for your PIE income. If it wasn’t, and they have the right information, they’ll make an adjustment.

When working out the adjustment, they’ll look at things like:

  • Tax credits used by the PIE
  • Other tax credits you have
  • Any amounts the PIE didn’t include in their calculations
  • If you had any PIE losses
  • If any other adjustments were made to your investment
  • If you share your investment with someone else
  • Anything else that might affect your tax rate

If the adjustment means you need to pay more tax, it will be added to your tax bill for the year.

If the adjustment means you should pay less tax, it will first reduce any tax you owe. If there’s still some left over, you can get a refund.

PIE schedular income includes both income and losses from these investments. The tax rates for this income are set out in a special schedule.

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Next up: HM 37: When income cannot be attributed

or “Rules for income that can't be linked to specific investors in a PIE”
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Part H Taxation of certain entities
Portfolio investment entities: Attributing income to investors

HM 36BCalculating PIE schedular income adjustments for natural person investors

  1. This section applies for the purposes of calculating the income tax liability under section BC 7 (Income tax liability of person with schedular income) of a natural person who is resident in New Zealand and is an investor in a multi-rate PIE to determine whether an adjustment must be made to the person’s income tax liability for a tax year for an amount of PIE schedular income.

  2. Despite subsection (1), this section does not apply to a natural person who derives PIE schedular income in the form of beneficiary income from a trust that is not a PIE.

  3. An adjustment must be made to the person’s income tax liability for the tax year for a tax credit or tax liability of the person that arises under section HM 47 when—

  4. the person’s prescribed investor rate for the tax year has not been applied to some or all of the person’s PIE schedular income for the tax year; and
    1. the Commissioner has information described in subsection (3) that relates to the person and is available for the tax year.

      1. The PIE schedular tax adjustment must take into account—

      2. an amount of a tax credit used by the PIE to satisfy the person’s income tax liability for the tax year:
        1. another attributed tax credit that the person has for the tax year, including an unused tax credit under section HM 52 or HM 54, or a tax credit under section LS 4 (Tax credits for certain exiting investors):
          1. an amount that has not been taken into account by the PIE in the calculation for the tax year, whether it is an amount of an adjustment for a tax credit for the person for the tax year or another identified adjustment for the person under sections HM 51 to HM 55 and subpart LS (Tax credits for multi-rate PIEs and investors), as applicable:
            1. whether—
              1. the person has an attributed PIE loss in relation to which the person’s prescribed investor rate for the tax year has not been applied:
                1. an adjustment has been made for the tax year under section HM 48 to the person’s investor interest, or a distribution paid to them, or a payment required from them:
                  1. the PIE has a tax credit for the tax year under section LS 1 (Tax credits for multi-rate PIEs) in relation to the amount of loss attributed to the investor:
                    1. a rate under section HM 60(6) applies for the investor for the tax year:
                      1. the person holds their investment in the PIE jointly with another person:
                      2. any other circumstance of which the Commissioner is aware that affects the application of the person’s prescribed investor rate to their attributed PIE income for the tax year.

                        1. For the purposes of this section, if a component of an item described in subsection (3) is a component of 1 or more other adjustment items, the value of the component is counted only once.

                        2. If the adjustment is positive, the amount of the adjustment is included in the investor’s schedular income tax liability for the tax year under section BC 7(5).

                        3. If the adjustment is negative,—

                        4. the amount of the adjustment is first applied to reduce the terminal tax payable by the person for the tax year:
                          1. any amount of adjustment remaining is refundable under sections RB 4, RM 2 to RM 8, and RM 10 (which relate to refunds and their use), as applicable:
                            1. the investor’s schedular income tax liability for the tax year under section BC 7(5) is zero.

                              1. For the purposes of this section, and sections CX 56, DB 53, and LA 6, PIE schedular income—

                              2. means an amount of attributed PIE income that a natural person who is resident in New Zealand and is an investor in a multi-rate PIE derives under section CP 1 (Attributed income of investors in multi-rate PIEs) to which the prescribed rates of tax set out in schedule 6, clause 1 (Prescribed rates: PIE investments and retirement scheme contributions) apply; and
                                1. includes an amount of attributed PIE loss of the person under section DB 53 (Attributed PIE losses of certain investors).

                                  Notes
                                  • Section HM 36B: inserted, on , by section 148(1) (and see section 148(2) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                                  • Section HM 36B(1) heading: replaced (with effect on 1 April 2020), on , by section 91(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(1): replaced (with effect on 1 April 2020), on , by section 91(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(1B) heading: inserted (with effect on 1 April 2020), on , by section 91(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(1B): inserted (with effect on 1 April 2020), on , by section 91(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(2) heading: replaced (with effect on 1 April 2020), on , by section 91(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(2): replaced (with effect on 1 April 2020), on , by section 91(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(3) heading: replaced (with effect on 1 April 2020), on , by section 91(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(3): replaced (with effect on 1 April 2020), on , by section 91(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(3B) heading: inserted (with effect on 1 April 2020), on , by section 91(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(3B): inserted (with effect on 1 April 2020), on , by section 91(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(4): amended (with effect on 1 April 2020), on , by section 91(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(5): amended (with effect on 1 April 2020), on , by section 91(3) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B(6): replaced (with effect on 1 April 2020), on , by section 91(4) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B list of defined terms attributed PIE loss: inserted (with effect on 1 April 2020), on , by section 91(5)(b) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B list of defined terms Commissioner: inserted (with effect on 1 April 2020), on , by section 91(5)(b) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B list of defined terms investor interest: inserted (with effect on 1 April 2020), on , by section 91(5)(b) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B list of defined terms pay: inserted (with effect on 1 April 2020), on , by section 91(5)(b) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                  • Section HM 36B list of defined terms residual income tax: repealed (with effect on 1 April 2020), on , by section 91(5)(a) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).