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  1. #31
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    Well All my taxable income and all my PIE income was correctly recorded on myIR. The IRD did my tax return and emailed me to look at it and if correct then submit it. Which I did. They did not include my PIE income.

    snoopy there would be little point in having PIR rates if all you were going to do was have to pay the difference between what you declared and your marginal rate. Defeats the purpose altogether.

    This is from page 24 of the guide

    Investments in Portfolio Investment Entities (PIEs)
    This year all attributed portfolio investment entity (PIE) income received by New Zealand resident individuals will be checked to make sure it has been taxed at the right prescribed investor rate (PIR) for the full year.
    Because PIE income is taxed differently to your other taxable income, your annual income tax calculation now includes a separate PIE calculation. This is to work out whether you have paid the right amount
    of tax on your PIE income based on the PIR you should have used. To find out what PIR you should be using, go to ird.govt.nz/pir
    If you did not use the correct PIR for the full year and the outcome of the calculation is
    • you did not pay enough tax, the difference is added to your tax on taxable income in Box 37.
    • you paid too much tax, the difference is used to reduce your tax to pay and any remaining credit refunded as part of calculating residual income tax at Box 37A.
    Page 42 has a worksheet to help you with the PIE calculation.

    It is simply to check that you are using the correct PIR. Nothing else. It is not included in your return.

    There is not much more I can say on the matter.

    Best of luck.

  2. #32
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    Quote Originally Posted by 777 View Post
    A reasonable summation I think. I am surprised that Fishers give tax advice though.
    Yes, in a way I am surprised too 777. FNZ ,Custodian for Fisher Funds Investments (and other coys also I imagine) send out their Tax User Guide with their Tax Report to assist with tax return preparation. They repeatedly state that investors should seek advice from a professional tax adviser. I have difficulty knowing who that brilliant person would be. I asked my accountant but he wasn't sure and said he would have to go to a third party (not sure who) and that while it would be a definitive answer it would cost $150.00!! Beats me why it has to be so difficult. In the guide FNZ say they assume fees and charges are deductible (item 20 in the report )and even show what box to put item 20 expenses in the IR3! Hello?!

    I think I may have opened a "can of worms" and I wonder how many other Fisher Funds investors have filed incorrect tax returns over the years which IRD have accepted... up until now!

  3. #33
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    Quote Originally Posted by herbert240 View Post
    Yes, in a way I am surprised too 777. FNZ ,Custodian for Fisher Funds Investments (and other coys also I imagine) send out their Tax User Guide with their Tax Report to assist with tax return preparation. They repeatedly state that investors should seek advice from a professional tax adviser. I have difficulty knowing who that brilliant person would be. I asked my accountant but he wasn't sure and said he would have to go to a third party (not sure who) and that while it would be a definitive answer it would cost $150.00!! Beats me why it has to be so difficult. In the guide FNZ say they assume fees and charges are deductible (item 20 in the report )and even show what box to put item 20 expenses in the IR3! Hello?!

    I think I may have opened a "can of worms" and I wonder how many other Fisher Funds investors have filed incorrect tax returns over the years which IRD have accepted... up until now!
    No surprise here - I can assure you if you lived in Canada or in the US and had a CFP handling your investments, they would know exactly of your tax situation. I don't know why in NZ CFPs here will not give advice on taxation. It's almost like they're so useless to begin with yet the NZ FMA insists these groups of people need to be regulated by them when they offer little advice to begin with. I will tell you, if more widely knowledge in NZ was provided to investors into say Kiwi Saver or managed fund, you will find more and more would not bother and go with the investing in residential property way. What i've seen is the way shares and KS has been marketed in NZ, the complexities of it adds to it's appeal (maybe?).

    $150 is cheap - I know accountants that charge $400/hr.

  4. #34
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    Quote Originally Posted by SBQ View Post
    No surprise here - I can assure you if you lived in Canada or in the US and had a CFP handling your investments, they would know exactly of your tax situation. I don't know why in NZ CFPs here will not give advice on taxation. It's almost like they're so useless to begin with yet the NZ FMA insists these groups of people need to be regulated by them when they offer little advice to begin with. I will tell you, if more widely knowledge in NZ was provided to investors into say Kiwi Saver or managed fund, you will find more and more would not bother and go with the investing in residential property way. What i've seen is the way shares and KS has been marketed in NZ, the complexities of it adds to it's appeal (maybe?).

    $150 is cheap - I know accountants that charge $400/hr.
    I hear ya SBQ! I find it so frustrating to have to go "digging" for info that should be clearly available without any ambiguity. As far as the $150 goes I agree. But i was bemused why an accountant who should be on top of my query should have to go to a third party to find out about my issue and then charge me back!

  5. #35
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    Quote Originally Posted by SBQ View Post
    No surprise here - I can assure you if you lived in Canada or in the US and had a CFP handling your investments, they would know exactly of your tax situation. I don't know why in NZ CFPs here will not give advice on taxation. It's almost like they're so useless to begin with yet the NZ FMA insists these groups of people need to be regulated by them when they offer little advice to begin with. I will tell you, if more widely knowledge in NZ was provided to investors into say Kiwi Saver or managed fund, you will find more and more would not bother and go with the investing in residential property way. What i've seen is the way shares and KS has been marketed in NZ, the complexities of it adds to it's appeal (maybe?).

    $150 is cheap - I know accountants that charge $400/hr.
    SBQ - I'm mildly curious. Are you Canadian, or did you just live there for some time?

  6. #36
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    Quote Originally Posted by SBQ View Post
    No surprise here - I can assure you if you lived in Canada or in the US and had a CFP handling your investments, they would know exactly of your tax situation. I don't know why in NZ CFPs here will not give advice on taxation. It's almost like they're so useless to begin with yet the NZ FMA insists these groups of people need to be regulated by them when they offer little advice to begin with. I will tell you, if more widely knowledge in NZ was provided to investors into say Kiwi Saver or managed fund, you will find more and more would not bother and go with the investing in residential property way. What i've seen is the way shares and KS has been marketed in NZ, the complexities of it adds to it's appeal (maybe?).

    $150 is cheap - I know accountants that charge $400/hr.
    SBQ - I'm mildly curious. Are you Canadian, or did you just live there for some time?

  7. #37
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    Quote Originally Posted by fungus pudding View Post
    SBQ - I'm mildly curious. Are you Canadian, or did you just live there for some time?
    Yes i'm an ex-pat Canadian with a background in Finance studies + BA in Economics. Upon my arrival to NZ some 25 years ago, it was considerable learning experience going from a time where foreign investment gains were not taxable -> a full on mess we have today with FIF (what shares are FIF exempted or not), the ambiguity on PIE funds, management fees from top to bottom when a person speaks to a financial advisor (if that adviser takes what we call in Canada a "Trailer Fee" or basically a kick back by the managed funds for pointing their clients to buy their managed funds), front & back load fees, etc. One thing certain as Warren Buffet puts it, "There is no shortage of the helpers in the finance industry trying to sell you on investments that you don't need... and as a sum of the whole, more money has been sent to those helpers than the amount of returns that investors actually see" (i'm paraphrasing).

    It's very interesting, the time when I left Canada was a period I hated the most about their taxation system. Income taxes were very high back then, likewise was GST/PST/HST in some provinces paying as much as 18%. Back then they had rules like a managed fund must not exceed 33% foreign content. Individuals had complex tax filing if they owned US equities directly. It was a mess but when I arrived in NZ, we had no tax on foreign investments. Not even a disclosure was required.

    Unfortunately I must say the tables had completely turned around. Canada had reduced income taxes through scaling the income brackets. Indexed the tax free personal exemption limits (ie 1st $10K of income is 0% income tax). GST was reduced to 5%. Lowering of import tariffs. To multiple plans for savings and investments to suit individual needs. Those who were disabled were able to have RDSP where portfolio gains 100% tax free. Hensen Trusts for the disabled where a trust is not taxed at 45% but instead, incomes in the such a trust would be taxed at the individual's personal income tax rate (CRA has to approve of the person's disability). Uni education keeps rising so the gov't brought out RESP (again, the gains & dividends are tax free for when the child is finished highschool, they use those funds to pay for schooling). Then there's TFSA which is available for EVERYONE over the age of 18. Indexed to inflation, currently $6,000 a year you put to your investment account and all gains are 100% tax free. You can withdraw and not lose the reserve amount if you put back those funds later on.

    When I look at what NZ has done over the past 25 years - it's certainly clear that they've only appealed to the rich and those owning houses. No plan to make education affordable - certainly giving 1st year uni tuition free is not a sustainable plan. Where are the savings incentives for those with disabilities? I saw NZ GST go from 10% to 15% in that same period. Now we have all sort of regulations that he FMA is trying to shove down people's throat. Stupid issues like "Oh you should not be putting your $ overseas in a foreign bank account because they should be licensed by the FMA". HELLO???? HELLOOOO?? NONE of the NZ banks have depository insurance! TDAmeritrade / Charles Schwab has the standard SIPC $500K coverage in addition to $150 MILLION coverage per account holder! Yet the NZ FMA believes they are the authority in protecting individual's assets invested abroad?

    Ok I think my rant is getting too serious. All i'm asking is there needs to be more clarity in the NZ financial industry from both investment & TAXATION point of view. And the FMA needs to quit creating an illusion that NZ is not the centre of the world in terms of investment choices.

  8. #38
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    Default What is a listed PIE? (Not answered)

    I have been having some discussion on PIE tax treatment of investments on the PFI thread. Rather than bog that thread down 'off topic' I have decided to resurrect this one. I thought I would go to the official source, the IRD website, to get the definitive word on some of these tax matters. I am afraid that following the official site on PIE tax matters is not easy. Starting with the question: "What is a listed PIE?" Surely that would not be too difficult a question for the IRD to answer! Here is what they had to say.

    From
    https://www.ird.govt.nz/roles/portfo...estment-entity

    Requirements for a listed PIE

    1/ At least 90% of the entity’s income must be passive.
    2/ Be or about to be listed on a recognised stock exchange in New Zealand.
    3/ Have only one investment class.
    4/ Investor interests must give the same rights to entity income.
    5/ Full imputation credit.

    ------------------------

    Aren't Kingfish a listed PIE? And aren't they active investors? If they are actively managing those funds it sounds like they are not a passive or index fund manager. So it sounds like Kingfish are not entitled to be a PIE! Who knew that? Being listed on an NZ exchange is important. But don't worry if you are not listed because you can claim you are 'about to be listed'! That is a good loophole to drive a truck through. I see that a PIE is only allowed 'one investment class'. So you can't have unit holders and warrant holders in the same PIE as an example. Anyone told Kingfish about that? "Investor Interests must give the same rights to equity income" I think this is saying that all of the PIE equity income must be shared in proportion to investor interests. But it is the equity income that gives the investor the interest - not the other way around. IRD have picked a very confusing way to denote things

    Lastly we come to the final clanger, which looks relevant to the tax matter I am interested in: "Full imputation credit." What does that mean? There is no verb, and no declaration of what is the subject or object in this 'sentence'. Does the PIE give, take, or ignore imputation credits? Do they have to have them or not have them? The explanation provided here is completely without meaning or direction.

    I don't have a clue what any of the requirements are for a listed PIE now that I have read the IRD introductory page. That page is pure drivel, nothing more.

    SNOOPY
    Last edited by Snoopy; 12-01-2024 at 09:12 PM.
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  9. #39
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    Default IR860: A guide 'FOR' PIEs

    Quote Originally Posted by Snoopy View Post
    I don't have a clue what any of the requirements are for a listed PIE now that I have read the IRD introductory page. That page is pure drivel, nothing more.
    I am looking through the guide below, with my eye on information in regard to 'listed PIEs', which is one of four kinds.
    https://www.ird.govt.nz/-/media/proj...20220119011852

    Notes from the above link are below (I simply put the word 'listed' into the pdf 'document word search' and saw what came up.)

    A 'listed PIE' (LP), a PIE that may be found on the NZX, is one of four PIE classifications and is not an MRP.

    However an alternatively classified 'Multi-rate PIE' (MRP), an entity that contains a foreign investment PIE, can still be listed on an index in New Zealand, without being a classified 'listed PIE'.

    Listed PIEs do not file 'PIE periodic returns' or 'annual reconciliations' and are required to continue to file income tax returns.

    Listed PIEs do not pass losses out to investors.

    Listed PIEs may pay dividends. Dividends paid by a listed PIE are required to be fully credited to the extent permitted by the imputation credits available (IOW listed PIEs cannot choose not to pass tax credits on).

    Unlike other PIEs, 'listed PIEs' are not required to provide quarterly reporting.

    From p12 of this document there is a list of collective requirements for a 'listed PIE' that contain details that were absent from the 'drivel content list' from the post above:
    "Passive income, (includes such things) such as dividends, interest and rent. For example: A company may run a supermarket. If its interest in the supermarket business equals or exceeds 10% (the investment type and income type requirements) of the total income of the
    company, it cannot become a PIE."

    From p14
    Imputation credit requirement: All distributions to members of an investor class must be fully imputed for the purpose of establishing the available subscribed capital amount. The extent that imputation credits are available is determined by the directors of the entity.

    An MRP cannot maintain an ICA (Imputation Credit Account).

    'Listed PIE's must maintain an ICA.

    From p19
    Distributions or dividends from listed PIEs to shareholders
    Distributions or dividends to New Zealand resident natural persons and New Zealand resident trustees that are shareholders in a listed PIE are excluded income unless the shareholder includes the dividend in their tax return. The amount of any distribution or dividend that is not fully imputed is also considered excluded income of the shareholder. These dividends are not liable for Resident Withholding Tax nor NRWT

    From p54
    "Where shares in a listed PIE are held as part of a share-trading business, any gains received on sale of the shares will be taxable, to an investor who is not a PIE."

    Investor Expenses
    Generally investor fees charged by the MRP in relation to an investor's interest in the MRP will be taken into account when it calculates the tax liability for the investor. The investor will not be able to claim the fees in their tax return.

    SNOOPY
    Last edited by Snoopy; 13-01-2024 at 06:51 AM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

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