Taxation of PIE income

[Snoopy]

My PIR rate is 17.5%. Previously, a sizeable part of my portfolio was in growth companies that paid little, or no, dividends, Thus, the dividends were low enough to keep my basic income well below $49,000 enabling me to maintain a 17.5% PIR rate.


However, now a portion of my investment is in NZX listed PIE companies, as well as non PIE cos. . Another portion is still in two PIE Funds.


The IRD web site and the dividend advices inform me that I have the option of declaring, or, not declaring the PIE income.
This implies that I can "cherry pick" which PIE dividends I include on my IR3. I assume, however, that is not true once the $70,000 threshold is breached. I am not there yet, so, the 2021 IR3 was fine.

You assume wrongly. Providing your PIR rate is correct, there is no need to declare any of your PIE income in your IR3.

If your PIR rate is 17.5%, but your income gets into the higher than $49k tax bracket, then you may be required to declare your PIE income to correct the amount of tax that should have been deducted at source. But if you inform all the institutions which hold your PIE income generating income units of your correct PIR rate, then there is no need to declare any PIE income in your tax return, irrespective of how high your income gets.

It remains optional to declare your PIE income in your IR3 at any time. But this is done for a special situation where some taxpayers can make use of PIE tax credits to offset tax payable from other income sources. For most people it does not make sense to declare their PIE income in their IR3.

SNOOPY