Most of TOWER’s managed funds are Portfolio Investment Entities (PIEs), which means many investors may now be paying less tax than before.
The real benefit of PIEs is that your share of taxable income earned in the PIE (PIE income) can be taxed at a rate which is based on the investor's own income, known as the Prescribed Investor Rate (PIR).
There are four PIRs: 0%, 10.5%, 17.5% and 28%. Individuals will qualify for either 10.5%, 17.5% or 28% depending on their level of income. You need to work out your PIR using the calculator below and provide your PIR and IRD number to TOWER at the same time to ensure you are taxed at the correct rate and benefit from the savings.
For important notes, see comments below. For more detailed information on PIEs and the way they are taxed, please click here
NB: If you don’t provide us with both your PIR and IRD number, you will be taxed at the top PIR of 28%.
* Any new application for an investment cannot be loaded if you don't provide your
PIR and IRD number.
** PIRs changed from 1 October 2010. Refer to www.ird.govt.nz for more information.
Where the investment is jointly held all parties must calculate and notify their PIR separately. The highest PIR will be applied to tax all PIE income on the joint investment.
If you have a PIR of 0%, you are required to include any investment income in your trust's, estate's, company's or charity's tax return.