PIE frequently asked questions

  • What is a PIE?

    In October 2007 tax legislation came into effect that allowed for the creation of a new investment type called a Portfolio Investment Entity, or a PIE as they're more commonly known. These are investment funds that have special tax rules - the maximum tax rate you'll pay on a PIE is currently 28%. So if you're paying 33% or 30% tax on your investments, Kiwibank's PIE Funds may allow you to keep more of your investment return!

  • Who is Kiwibank Investment Management Limited and why should I invest with them?

    Kiwibank established Kiwibank Investment Management Limited (KBIM), as a wholly owned subsidiary of Kiwibank, to specifically manage our PIE investment products through a Unit Trust. This means we can invest 100% of your PIE money into Kiwibank deposits.

    It's important that you get professional taxation advice before you invest or make changes to your investment. This is because the taxation treatment of your investment will be specific to your circumstances and to the nature of your investment. Kiwibank staff can't provide you with any taxation or investment advice.

  • Who can invest in a PIE at Kiwibank?

    Individual or joint investors (personal customers), or companies, trusts and organisations (non personal customers) can invest in a PIE with Kiwibank.

    Personal customers

    • If you're opening a PIE fund jointly or in partnership, the highest tax rate of the individuals will be applied to your investment.
    • You must also be over 18 years of age and know your IRD number (a PIE investment can't be established if you don't know your IRD number).

    Non personal customers

    Non personal customers should complete the application form for companies, trusts and organisations in the back of the PIE Investment Statement.

  • Can I transfer my existing Kiwibank Online Call and Term Deposits to new PIE investments?

    Yes you can. You must read the Kiwibank PIE Online Call Fund and/or PIE Term Deposit Fund Investment Statements and send us a PIE application form (taking special care to complete the transfer section within the application form).

    Each new investment is a new unit. If you want to have more than one investment in a PIE Fund, you'll need to complete a new application form for each one. Additional forms can be downloaded from this website or they're available by calling 0800 555 PIE (0800 555 743).

  • Can I have more than one PIE investment?

    Yes, but you'll need to complete a new application form for each one. Additional forms can be downloaded from this website or they're available by calling 0800 555 PIE (0800 555 743).

  • Can the balance of my PIE Online Call fund drop below $2,000?

    If you want to withdraw money from your PIE Online Call Fund, and this will take the balance below $2,000, then you'll have to withdraw the full balance and close the Fund. You can do this at your local Kiwibank, by calling 0800 555 743, or by sending us a request in writing to the Manager, Kiwibank Investment Management Limited, Private Bag 39888, Wellington 5045.

  • When am I paid a return?

    If you invest in the Kiwibank PIE Online Call Fund you'll be paid your return, less tax (if any), at your declared PIR. This will be paid at the end of each calendar month, into your Unit account.

    The Kiwibank PIE Term Deposit Fund pays interest, less tax (if any), at your declared PIR, on your agreed redemption date

    • when you make a partial withdrawal
    • or redeem your Unit entirely (with our agreement) and
    • on 31st March if you hold a Unit in the Fund on that date;

  • What is a PIR?

    The Prescribed Investor Rate (PIR) is the tax rate that applies to the returns from a PIE investment. For the Kiwibank PIE Unit Trust, the rate is either 10.5%, 17.5% or 28% for personal investors or 0% or 28% for non-personal investors (only companies can select 0%). The key advantage of a PIE is that the top tax rate is 28%.

  • How do I work out my PIR?

    The table below can help you work out your PIR. For personal customers, your PIR will be either 10.5%, 17.5% or 28%. For non-personal customers (other than companies which must select 0%), you may have a choice of PIR. Check the table below to work out which PIR you should select.

    Please remember, if you're opening a PIE fund jointly (or in partnership), the highest tax rate of the individuals will be applied to your investment.

    For more information, check the IRD site

    Prescribed Investor Rates (for income allocated from 1 October 2010)
    New Zealand Tax Resident Individual Investors PIR

    If in one of the last two Income Years:

    • the investor’s taxable income was $14,000 or less; and
    • when combined with the PIE Income of the investor, that investor’s total income was $48,000 or less; and
    • the investor has elected this rate and provided their IRD number.
    		 10.5%

    If in one of the last two Income Years:

    • the investor’s taxable income was $48,000 or less; and
    • when combined with the PIE Income of the investor, that investor’s total income was $70,000 or less; and
    • the 10.5% rate does not apply; and
    • the investor has elected this rate and provided their IRD number.
    		 17.5%

    If:

    • neither the 10.5% rate nor the 17.5% rate applies; and
    • the investor has elected this rate and provided their IRD number.
    		 28%

    If the investor has not elected a PIR and/or provided their IRD number.

    		 28%

    Other Investors

    The investor:

    • is not a New Zealand resident for tax purposes; or
    • has not elected a PIR and/or provided its IRD number.
    		 28%

    The investor is a New Zealand resident for tax purposes, has provided its IRD number and elected a PIR, and is a trustee of:

    • a trust (excluding a charitable trust, a testamentary trust or a unit trust); or
    • a PIE (that is a trust, other than a unit trust); or
    • a superannuation fund.
    		 The investor may choose 0%, 17.5% or 28%
    The investor is a New Zealand resident for tax purposes, has provided its IRD number and elected this PIR, and is a trustee of a testamentary trust. The investor may choose 0%, 10.5%, 17.5% or 28%

    The investor is a New Zealand resident for tax purposes, has provided its IRD number and elected a 0% PIR, and is:

    • a company (includes a unit trust); or
    • a registered charity; or
    • a PIE (other than a trust of the type referred to in the previous section); or
    • a PIP.
    		 0%

    The investor is a New Zealand resident for tax purposes and is investing jointly with another person or entity.

    		 The highest PIR of the joint investors

  • What PIR do I use if this a joint investment or a partnership?

    If more than one person owns the investment, the highest PIR will apply.

  • What do I do if my PIR changes?

    If your PIR changes at any time you'll need to provide notification in writing to Kiwbank, and the new rate will be applied from that point to any PIE investment return you receive. Each year we'll contact you to remind you to confirm your PIR.

  • What happens if I supply the wrong PIR?

    You'll need to provide your PIR and IRD number, and other details, when you apply. It's important that you provide your PIR when requested. If you fail to provide your PIR and IRD number, then your returns will be taxed at the current PIR default rate of 28%. This rate could be higher than your correct PIR.

    Also, based on current tax legislation, if you provide a PIR that is lower than your correct PIR, you'll be liable to pay any tax shortfall to the Inland Revenue and file a tax return.

    If you're an individual and don't provide a PIR, or advise a PIR that is higher than the applicable rate, you won't be able to claim back any excess tax paid.

  • What happens if I don't supply a PIR?

    We'll use the default rate, which is 28%.

  • Are there any management fees with this investment?

    There are no fees.

  • Do investors need to complete a tax return?

    Personal investors don't need to complete a tax return if you've supplied the correct PIR and IRD number

    For non-personal investors:

    • You won't need to complete a tax return if you've supplied the correct PIR and your IRD number, unless your PIR is 0%
    • If you have provided a PIR of 0%, you'll be required to calculate and pay your own tax in respect of income earned

  • What is the Kiwibank Guarantee?

    Unlike other Unit Trusts we guarantee our payment obligations and any amounts owing to you under the Unit Trust.

    And:

    • We’ll pay you any shortfall between the amount you would receive on redeeming your Unit, or in the winding up of the Trust and the balance of your Unit Account.
    • This requires Kiwibank to ensure that, on redemption or winding up, you’ll be paid the amount of your investment in the Trust, including your proportion of interest earned by the Trust.

Conditions

Kiwibank Limited has guaranteed the Kiwibank PIE Unit Trust's payment obligations, including any payment obligation in respect of any investment made with the Kiwibank PIE Unit Trust. The guarantee does not apply to payment obligations where the terms of the obligation expressly provide in writing that the obligation will not have the benefit of the guarantee. The guarantee is not secured and its amount is not limited. The guarantee is unconditional and is terminable by Kiwibank Limited upon three months' notice to the Kiwibank PIE Unit Trust. Any such termination does not affect any existing payment obligations owed under the guarantee at the termination date.