Definition
What is PIE Fund (Portfolio Investment Entity)?
A tax-efficient fund structure where tax is calculated at your Prescribed Investor Rate, often lower than marginal rates.
A Portfolio Investment Entity (PIE) is a type of investment fund in New Zealand that receives special tax treatment. PIE funds calculate tax at each investor's Prescribed Investor Rate (PIR) rather than the fund's tax rate, often resulting in significant tax savings for investors.
PIR Rates: - 10.5% - if taxable income under $14,000 - 17.5% - if taxable income under $48,000 - 28% - if taxable income over $48,000
Key Benefits: - Tax paid at PIR (often lower than marginal rate of up to 39%) - No requirement to file tax returns for PIE income - Tax is handled by the fund, simplifying compliance - Foreign Investment Fund (FIF) exemptions for international investments
Important: You must notify the fund of your correct PIR. Using too low a rate may result in additional tax and penalties. PIE funds are common in private credit, property, and diversified investment strategies.
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This glossary provides general educational information only and does not constitute financial, legal, or tax advice. Definitions and explanations are simplified for educational purposes and may not cover all aspects or nuances of each term.
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