A reasonable summation I think. I am surprised that Fishers give tax advice though.
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Snoopy I am sure you are wrong in interpretation and this year is no different than previous years. Once filing your return, if your selected PIR is wrong, they will communicate that with you.
One thing I noticed is only my PIE income from funds and term funds have been noted on my IR. All the PIE distributions from listed shares are not there. The only reason that PIE income is on myIR is for the IRD to check that the correct PIR is being used.
Herbert, I think your Fisher contact was trying to be helpful in an area where he didn't have sufficient expertise to comment.
My understanding is, that the fees are deducted from the gross income before the PIR tax is deducted. That is, tax is calculated on the net income.
You may be correct 777. The IRD reference page for calculating individual PIR figures would certainly indicate you are correct for FY2021 at least. The problem is there is no date on that page. So there is no way to know if it has been rewritten for FY2021. Given the law on including PIE information in your IR3 tax return for FY2021 has been rewritten, I would think the referenced PIR calculation page would have been rewritten at the same time. But there is no way to know for sure. And the best indication of what was on the equivalent web page last year (which no longer exists) is to look at the downstream calculation forms and instructions (that still do exist), in the form of IR855-2020.
I don't know if the intent on how to calculate a PIR rate has changed from FY2020 to FY2021. All I can do is follow the procedure on the forms printed at the time. And my conclusion on doing this is that for FY2020 at least (when form IR855-2020 was created) people should not include their PIE income in calculating their PIR. The form seems quite clear on this matter to me. Whether that was the intention of the form, I cannot say. Maybe IRD drafted the form in a way that it could be interpreted in more than one way, by mistake? But if you follow the instructions in the IRD form as stated with your interpretation being honestly held and also being in line with the law as espoused in the form, I don't see how you can be called out as doing your PIR calculation wrongly.
What happened to me was that the bank changed my PIR rate on my PIE cash fund midway through the year, This was not under any instruction from me. I had given them the correct PIR rate. They just changed it with no consultation which is why I didn't know about it! The bank later corrected their error without telling me, which is why I had not understand that anything had gone wrong. It was the IRD that picked up the error and at first I thought it was the IRD that had made a mistake. It took a methodical going through the bank statements by me to confirm what the IRD already knew - it was the bank's fault all along.
All this happened last year, before there was any requirement to add PIE income information to one's own IR3 return. So I don't accept your explanation that this PIE information is required to check if you are on the right PIR rate. In my case the IRD were able to do this without any input from me, because they got their information directly from the bank.
As it happens, I am on the 28% PIE rate myself, and I have enough non-PIE income to ensure that I won't drop below that rate. I don't have direct experience with what happens when you are 'on the cusp' between two PIE rates.
SNOOPY
Your post
"All this happened last year, before there was any requirement to add PIE income information to one's own IR3 return. So I don't accept your explanation that this PIE information is required to check if you are on the right PIR rate. In my case the IRD were able to do this without any input from me, because they got their information directly from the bank."
You don't have to add PIE to your return. The IRD will do the calculation in our case (28%) not using it. They just calculate your tax as we used to manually do it without PIE income.. If you put it in your return then you have to pay tax on it at your marginal rate. Who would want to do that? I'll stick to my what I posted.
You are over complicating the whole procedure. It is relatively simple especially if you are on the 28% rate.
Duplicated again.
I am afraid the process is no longer as simple as you claim.
References I refer to are in the IR3G guide document for FY2021
Under "Question 4 New Zealand Dividends"
"If you receive dividends from a portfolio investment entity (PIE) that is a listed company and does not use your prescribed investor rate, you can decide whether or not to include the dividends in your return."
Under Question 36 "Portfolio Investment Entity calculation"
"Copy the Total PIE deductions and Total PIE Income/Loss from your Summary of Income, details in myIR or your investor statements to boxes 36A and 36B of your return. Then copy box 36A to Box 2 and 36B to Box 1 in the worksheet below."
If you decide to declare your PIE dividend income under question 4, the new instructions also require you to declare it under question 36 as well. This means that when you add your PIE income to your declared other income you will be counting any declared PIE income twice. This looks like a mistake in the IR3 instructions. All scenarios have not been thought through.
Clearly you do have to add PIE to your return, as question 36 on the IR3 specifically asks for it.
SNOOPY
The above statement that I made in good faith is, from FY2021, no longer correct. if you go to page 42 in the IR3G for FY2021 you will see a PIE worksheet with this statement at the end of it
"Copy the amount in Box 5 to Box 36C of your return, if you are entitled to a refund of PIE tax enter a minus sign at the end of the cents box."
For the first time you can get a refund if you overpay your PIE tax.
SNOOPY