IRD treatment of PIE dividends

[SPC]

I have struck an issue with how IRD are treating PIE income from NZX listed PIEs for Tax Year 2019 2020 and Im wondering if other PIE holders who complete EOY individual tax returns using MYIR are also affected. I can't be the only investor affected by this issue.
The issue is that for some reason IRD are populating the dividends data in MyIR with PIE dividends despite these being exempt and treating them as NON pie dividends resulting in an increase in assessable dividend income. IRD are claiming currently there isn't a problem. They have never previously appeared. They are disclosed voluntarily should investors choose too.
I'm wondering if any other ST members holding listed company PIE investments have logged into their MyIR yet and checked if their non declarable PIE divs have also mysteriously appeared in 'Dividend income'.
Example PIE dividends affected are ARG, BRM, MLN.
Due to bulk data automation these days it must be affecting other PIE investors.

[kiwico]

I've long completed an IR3 each year and the data carried through by the IRD for dividends was woeful this year. I understood this new approach was to remove the need to do a return but instead it appears to promote the need for a return to correct the IRD's wrong assumptions / data collection. [Unless there is an easier way to fix their mistakes.]

[blackcap]

I've long completed an IR3 each year and the data carried through by the IRD for dividends was woeful this year. I understood this new approach was to remove the need to do a return but instead it appears to promote the need for a return to correct the IRD's wrong assumptions / data collection. [Unless there is an easier way to fix their mistakes.]

I am in the same boat. Luckily I also do an IR3 so an aware of the issues. There were dividends pre-populated from TRA, but not other companies. Growing pains maybe, or other problems with the IRD system. But not all dividends get through so you really do need to still work out your own dividend income and advise the IRD of the correct amounts.

[Dave]

I have the same issue with a couple of PIEs in dividends (but not much of the dividends that should be there). I think was same last year and I filed online with the correct info and got a refund within a couple days. Interest income looks ok in mine but generally I ignore it all and continue to file an IR3.

[Grimy]

And same here. PIE companies included, but almost all of my normal non-PIE dividend payers are not included. And, a few investments they have got totally wrong figures for.
Fixed interest/bonds seem to be almost correct.
It was a bit messy last year, but this time round it's been a shocker!
A lot more work sending attachments to explain why I don't agree with their figures...…..
And if last year is anything to go by, they will probably completely ignore my figures (and attached proof), and just go with what their system says.
They said last year that this year's return information would be a lot more complete and correct compared to last year.
Yeah, right!

[Southern Lad]

Provision of investment income data to IRD has been voluntary up to 31 March 2020 but compulsory from 1 April 2020 onwards. See https://www.ird.govt.nz/income-tax/withholding-taxes/resident-withholding-tax-rwt/payers/investment-income-reporting/reporting-requirements-from-1-april-2020

Therefore data the IRD hold for the 2020 tax year won’t be comprehensive- it only includes dividends paid by those companies who have voluntarily supplied dividend data. Don’t rely on it to complete your 2020 tax return however the position should be much better for the 2021 and future tax years.

Care does need to be taken around deciding whether to include in your tax return PIE income from both listed PIE’s and multi rate PIE’s. With listed PIE’s, it will generally work to your advantage to include taxable distributions if your top marginal rate is 10,5% or 17.5% (i.e. individuals with total taxable income less than $48,000) whereas with multi-rate PIE’s you can’t include the income if the PIR you used was too high but your are required to include the the income if your PIR was too low. Selecting the correct PIR is not straight forward as it requires you to calculate income (including PIE income) over more than one year.

It’s useful if the IRD system has the data so you can check but unhelpful if it includes the PIE income in your tax calculation where you either aren’t required to include it or it’s in your interests to choose not to include it.

[artemis]

There is a field (Confirm) on the IR3 to explain why any info already held by IRD is changed. I assume there is a manual check and if the reason is eg dividends increased and if figure reported is more than the one held the return will get the tick. If less a further check. Next year should be a divvy match in most cases.

Just assuming but makes sense to me.

[SPC]

Yes thanks SL for that info. In my case I did not wish to include listed pie income in my return and never have before. However this year IRD have captured a 'partial' but incomplete view of my listed PIE divs and populated the dividends field. I have asked IRD to remove the PIE divs but they won't despite my protest.
So now it looks like I'll have to add all the missing div tax info for all the listed PIEs for the full tax year which dramatically alters my tax position...up a few brackets. After years of keeping these off my tax position it seems I'm being forced to disclose them even tho I don't legally need to do so under Pie tax rulings.

[Grimy]

As I mentioned above, last year I added missing information and actually had more tax to pay than IRD had calculated. They ignored my figures and stuck with theirs...…
And as SPC has mentioned, if you explain why something shouldn't be included they ignore that as well. On one of my investments this year they have the gross payment doubled up, but have the correct imputation credits and RWT. I'll point that out and send copies of the payments I have received, but not holding my breath that they'll correct it.
It's as though you may as well just tick the 'confirm' their figures box, as it seems they don't want to accept that I may know my figures better than they do.

[nztx]

Listed PIE dividends have also been reported as taxable dividends (along with any Imputation credits) for Sharesies
account holders as well

Having been aware of IRD Investment Reporting changes for some time, I raised with them whether they were going
to catch up with all Power Consumer Trust distribution reciprients .. an interesting situation, but where these trusts
are in place, every power account holder will have such income most years

Do the Trusts actually have correct Holder names ?
Their bank details
Their IRD Numbers ?

The answer to most of these will be I suspect now still a resounding NO

As another thought - there are instances of incorrect or erroneous Investment Income, Tax credits & Deductions
being reported under the new Regime to IRD.

There may be instances where income & tax credits / deductions have not been reported for some months to IRD.
I know of couple for the 2019/20 year to date which have required corrections by payer through to IRD & bound to be more

Always keep your own personal record of any Investment Income etc & dont be shy in challenging IRD on what they have
been fed by Investment Income Reporters, if you believe it to be incorrect or erroneous

[Beagle]

That does not sound good. I had no problem overriding the IRD’s dividend, imputation and witholding tax figures when filing online IR3.

Neither did I. Their system for the year ended 31 March 2020 is a complete dog's breakfast and you MUST override it if you want the correct information to be included in your return. My understanding is there is a new reporting system for all financial entities and they must report all interest and dividends on a monthly basis to the IRD effective from 1 April 2020. Hopefully the IRD's system will be far more accurate next year but people should not hold their breath for that and as always are better to check their own interest and dividend statements to ensure what the IRD have captured in their system is accurate.

[Grimy]

That does not sound good. I had no problem overriding the IRD’s dividend, imputation and witholding tax figures when filing online IR3.

I had no problem overriding/changing the incorrect figures IRD had pre-populated the form with last year.
It was when they sent the final statement, they had used their figures that were there originally, not the corrected amounts. They missed out on a couple of hundred dollars, so their problem. Just wouldn't want to see them do the same if their figures show too much tax to pay.
I run a spreadsheet for all income during the year, and print out dividend & interest copies and manually add everything up as well, to make sure they match - which they do. It is then annoying to have so many mistakes come through on the IRD statements.
And even more annoying chasing them up to correct their mistakes, but to be ignored...…
About to submit my wife's return with heaps of attachments of corrections and omissions to back up the figures I have had to override. Can hardly wait to see what comes back.
I'm sure next year will be fine :-)

[waikare]

I am with you on that. You certainly can’t trust their numbers on dividends, imputation credits and witholding tax.

I updated their figures that they had inserted regarding my dividend details, taken from a running spreadsheet I maintain through the year.

I completed my return last Thursday evening 28th May, and the money was in my account early afternoon on Tuesday, 2nd pretty good considering Monday was a holiday.
They paid out the exact amount I claimed for.

[Waiuta]

I use Sharesight's program and edit their input to agree with my interest and dividend certificates when they arrive. Their Taxable Income Report reflects that. I use these figures to file my IR3 plus any other bank interest RWT certs.
We also hold KPG and they are NOT included in the Sharesight Taxable Income Report. I asked our accountants about inclusion but they confirmed there is no need to include them.
All our shares etc are held jointly so I filed both returns in MYIR and we had our refunds within a couple of days exactly as filed. I also included the Sharesight subscription as a cost.
Hope this helps.

[Philz]

As a newby here goes
Of interest I have KFL and MLN listed pie dividends on 2019 IRD tax summary, also noted PFI on current MYIRD dividends. Talked to IRD and they basically said if listed pie has been reported then needs to be included in end of year assessment, if not reported choose if included, wasn't happy so went to a listed PIE manager and here is the response:

"I discussed the matter of the PIE dividends appearing in shareholder tax returns at length with both our Registrar (Computershare) & the IRD and unfortunately the IRD can’t fix their error.

From late last year our registrar Computershare started sending the IRD a direct feed of the distributions/dividends and other tax related details re all of the shareholders on their registrar, including the listed investment company (LIC) shareholders. Unfortunately the IRDs system can’t differentiate between dividends from a normal company verses dividends from a PIE. Once the IRD realised their problem they stopped Computershare sending through the PIE dividend data.

Unfortunately the PIE dividend data that has been sent to the IRD can’t be backed out.

The IRD are aware of the problem & have stated in writing that any shareholder/ tax payer who has PIE dividends incorrectly recorded in their IRD produced tax return/ position can request the IRD to remove them.

In the future the IRD system will be enhanced to enable PIE dividends to be separately classified, & at that point in time Computershare will resume sending our LIC shareholder dividend information to the IRD.

We understand that in addition to the above IRD error, where the registered shareholder is a Family Trust it would appear that some of the PIE dividends have been flowed through to the underlying individual Trustees of the Family Trust.

We’ve written to the IRD re the above errors, and they’ve made positive noises re trying to fix the incorrect taxpayer/shareholder outcomes, however at this stage we’ve yet to see any proof of their efforts"

Talking to another manager they were surprised the problem was still occurring in May 2020 as they understood computershare had stopped sending IRD listed pie dividend reports.

I plan to do my various IR3 IR6 returns and just enter correct figures, online drafts appear ok so far as IRD are missing heaps normal dividends so my correct figures are larger. If that dosn't work will file paper copy with correct figures. Regardless my records are correct and will stand any audit.

[Grimy]

Thanks for that Philz. Welcome to the forum.
It is a bit of a mess isn't it!
Hopefully the IRD's "in the future" and "positive noises" will eventuate, but as your PIE manager has said, I also don't see much in the way of their "efforts" either.
I did my wife's return, with lots of changes - attached all the relevant paperwork (the process took longer than the old paper system of pre a couple of years ago), and they accepted my figures. But it was a bigger mess to sort out than last year-that's for sure.

[kerryo]

I logged into myIR and could see some dividends already listed in my IR3 and all of my interest payments recorded from various banks etc.
I couldn't alter anything as my IR3, populated by Inland Revenue had not come up for review yet. They were apparently being done in batches and it could take until the end of July to get to mine. There was no mention of my surplus imputation credits being carried forward, so I rang and made an online appointment for a call back which could take 12-18 mins. A very nice girl rang back after 25mins and after hearing my story, asked if I would like to have access to my IR3 in order to correct the dividend information.
Within 15mins I had updated my dividend totals and finished and filed my online IR3.
Within 1 day I received an online letter verifying my imputation credits carried forward.
After 2 days my IR3 return was approved and my refund deposited to my bank.
I was very impressed. :t_up:

[Rep]

I filed my return a few weeks ago and had a similar experience - the myIR had incomplete listing of dividends, imputation credits and RWT and also had the PIE income.
I made adjustments to include the missing dividends, ICs and RWT that increased income and added some income that wasn't taxed at source before duly paying the residual outstanding taxes.
I would echo that the Sharesight taxable income report is pretty handy for compiling and keeping track of the share income.

As an aside, I also filed for the donation tax credits for Tax Year 2020 including the receipts from the IRD approved donee organisations and after a couple of weeks I have now received my tax credits into my bank from the IRD.

[Philz]

Update on May2020 listed pie dividends from PFI appearing on myir taxable income, computershare being made aware have now somehow got IRD to delete files for this. PFI all correct now for my 2021 year, don't know but assume all shareholders would have had PFI listed PIE dividends deleted for May on IRD taxable income.

I do number of tax returns for my grandchildren and family trusts as well as my own.

I also noted a few weeks ago a PIE AMP kiwisaver double entry completely disappeared off myir 2020 for a few days then correctly appeared as single entry. Took a while to work out why totals changed but lucky I had an old print and could see differences. I have little confidence on what I see and cannot see in myir. Primary records are best source, not IRD.

[Philz]

Hi Kerryo, you my find IRD will have you marked for online IR3 next tax year and you update/change and file.