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Income from Portfolio Investment Entities (PIE’s) – Check your Prescribed Investor Rate (PIR)

Income from Portfolio Investment Entities (PIE’s) – Check your Prescribed Investor Rate (PIR)

Shelley Yeates
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If you have investments in PIE’s (the most common one being a KiwiSaver account), you need to make sure the income is being taxed at the correct rate.  For a New Zealand resident individual, the correct Prescribed Investor Rate (PIR) is based on your income for the last two years. 

 

If your PIE income is taxed at the correct PIR rate, that income does not have to be included in your tax return.  The PIR rate you should select is based on your worldwide income for the last two years (this includes your PIE income).  The rates are as follows:

Taxable Income

Taxable Income Including Net PIE Income

Correct PIR Rate

$14,000 or less

$48,000 or less

10.5%

$48,000 or less

$70,000 or less

17.5%

$48,001 or more

$70,000 or more

28%

 

It is important that you review your PIR rate each year and make sure it is correct based on your taxable income plus your PIE income for the last two years.  Do the calculation for the last two years, then select the lowest rate that is applicable for either of those two years.

 

Now is a good time to review your PIR rate, as you should have recently received your statement detailing your annual income from your PIE investments.  If your rate is incorrect you should contact your PIE fund directly and get them to change it to the correct rate.

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