Investors in a PIE (Portfolio Investment Entity) are required to notify the PIE of their prescribed investor rate (PIR) ie their correct tax rate. PIR’s differ depending on who has made the investment as follows:
Individuals – Individuals can currently choose a PIR of either 19.5% or 30%. From 1 April 2010 individuals will have a choice of three PIRs, 12.5%, 21% and 30%;
Trusts – Trusts can currently choose a PIR of 0%, 19.5% or 30%, from 1 April 2010 Trust’s PIR rates are 0%, 12.5%, 21% and 30%;
Companies – Companies have a PIR of 0%;
PIE investors must ensure that they notify their investment provider of the correct PIR, failure to notify the correct PIR may result in paying more tax on investment income than is necessary.