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!
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.
Individual or joint investors (personal customers), or companies, trusts and organisations (non personal customers) can invest in a PIE with Kiwibank.
Non personal customers
Non personal customers should complete the application form for companies, trusts and organisations in the back of the PIE Investment Statement.
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).
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).
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.
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
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%.
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:
If in one of the last two Income Years:
If the investor has not elected a PIR and/or provided their IRD number.
The investor is a New Zealand resident for tax purposes, has provided its IRD number and elected a PIR, and is a trustee of:
|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:
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|
If more than one person owns the investment, the highest PIR will apply.
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.
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.
We'll use the default rate, which is 28%.
There are no fees.
Personal investors don't need to complete a tax return if you've supplied the correct PIR and IRD number
For non-personal investors:
Unlike other Unit Trusts we guarantee our payment obligations and any amounts owing to you under the Unit Trust.
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.