How will the new investment tax rules work for you?
What is PIE?
What is a PIR?
Why do you need my PIE tax rate?
Why do you need my IRD number?
Where can I go to see the unit price?
How do I find out what my Prescribed Investor Rate (PIR) is?
What happens if I do not give you my IRD number or PIR?
What is my marginal tax rate?
Are PIE tax rates changing along with personal tax rates?
Will I have to complete a tax return?
How do I change/update my PIR with you?
We have a family trust. Should we be taxed at 0%?
Do I use the same PIE tax rate for each product I have with AMP?
My PIR is 0%. How am I taxed?
We have a joint investment with you, do you need both of us to give you our IRD and PIR details? Why?
Which of AMP’s products are impacted by PIE tax?
Will AMP provide me with a tax certificate or statement?
When do you send me a tax certificate or statement?
How is my PIE tax calculated?
When do you collect and file my PIE tax?
When do I need to have notified you of my PIR and IRD no by?
Why is AMP taking tax off now when it never used to? How was I taxed before? How does my fund pay tax now?
What do I need to do to remove a joint investor from my investment plan? How will this impact my PIE tax liability?
What do we do if we want to split our investment plan?
I would like to add a joint owner to my investment plan. How will this affect the PIE tax liability on my investments?
I am going on maternity leave, what do the PIE tax changes mean for me?
You have said I may need to talk to a tax professional, who would that be for me?
Why have AMP changed the way my funds are taxed (changed to PIE)?
What is a PIE tax rebate?
How does a 0% investor realise a tax rebate?
Will I receive a tax rebate?
How will a tax rebate get paid to me?
How have you worked out my PIE tax liability?
I received a PIE tax rebate. Does this mean my investment performed badly?
I am enrolling my children in KiwiSaver. What PIE Tax rate applies for them?
AMP charges me other fees, how are these treated under the PIE tax rules?
I have investment linked / insurance bond investments. What does PIE mean for those investments?
What is ‘FDR’?
What is PIE?
PIE stands for a Portfolio Investment Entity. A PIE is a managed fund that has elected to pay tax based on investors’ (PIE) tax rates.
What is a PIR?
PIR stands for Prescribed Investor Rate. You will also see this referred to by AMP as a PIE Tax Rate. The PIR is the rate at which an individual’s PIE tax is calculated.
Why do you need my PIE tax rate?
If you have been asked for your PIE tax rate (or Prescibed Investor Rate - PIR) it is because your fund is a 'PIE' tax investment product. This means that the taxable gains/growth on your investment will be taxed at your individual PIE tax rate. We need your PIE tax rate so that we can ensure that you are charged the correct tax on your investment, in the future.
Why do you need my IRD number?
We will periodically file a tax statement with Inland Revenue detailing your PIE income and expenses, and any tax payable or rebates owing. Your IRD number is needed to ensure Inland Revenue can verify that any tax paid on your behalf, or tax rebates owing, have been calculated at the correct rate. If we do not have your IRD number we will have to apply the default rate.
Where can I go to see the unit price?
The AMP Investment Product unit prices are available here.
To reflect the PIE tax rules from 1 October 2007, AMP has incorporated gross unit pricing for all of its current PIE managed funds. These funds include:
- AMP Classic Investments
- AMP Premium Investments
- AMP KiwiSaver Scheme, and
- The New Zealand Retirement Trust workplace based retirement plan.
Unit prices shown for PIE funds after 30 September 2007 are after management fees have been deducted, but before tax.
How do I find out what my Prescribed Investor Rate (PIR) is?
We are able to offer you some guidelines including these FAQs, an IRD PIE/PIR flowchart, and the brochure that you can download from this website under Home > Savings & investments > brochures and forms on what your PIR may be. However, AMP cannot be responsible for determining your PIR and we recommend you seek advice from a tax specialist or Inland Revenue to confirm what your correct PIR is.
What happens if I do not give you my IRD number or PIR?
If you haven’t given us your IRD number or PIR, your PIE tax will be calculated and deducted at the current 'default rate' of 30%. This means your PIE tax liability may be calculated at too high a rate. You have until the last day in each tax year (31 March) or the date of your full withdrawal to give us your correct PIR for that tax year or withdrawal. Once we have paid your PIE tax to Inland Revenue you will need to contact them directly to request a refund of any overpaid PIE tax. At the time of publishing this FAQ, it is unclear whether Inland Revenue will issue refunds of overpaid PIE tax. No refund will be made by AMP for tax deducted at too high a rate unless we believe it is our error.
What is my marginal tax rate?
From 1 April 2009 the following marginal tax rates apply to individuals:
12.5% - For money you earn between $0 and $14,000
21% - For money you earn between $14,001 and $48,000
33 % - For money you earn between $48,001 and $70,000
38% - For money you earn over $70,000
If you would like to visit the IRD’s page on tax rates, please click here.
Are PIE tax rates changing along with personal tax rates?
The Government has signalled their intention to change PIE tax rates and their thresholds for the tax year beginning 1 April 2010. We are keeping a close eye on developments.
Will I have to complete a tax return?
We understand that these new tax rules shouldn’t affect your obligation to file a tax return, unless you have understated your Prescribed Investor Rate. If you have notified a 19.5% Prescribed Investor Rate and were not entitled to do this, Inland Revenue may contact you and require you to file a tax return. If you currently file a tax return you should seek advice from your tax specialist or Inland Revenue.
How do I change/update my PIR with you?
Please call our Customer Contact Centre on 0800 267 111 between the hours of 8am-8pm Monday to Thursday or until 6.30pm on Fridays.
Alternatively, you can:
- email AMP
- complete a 'Change of details' form
- write to us at AMP Financial Services, PO Box 55, Shortland Street, Auckland 1140, or
- free fax 0800 509 955 with your details. Please include the following information, full names, date of birth and address along with your plan numbers.
We have a family trust. Should we be taxed at 0%?
Family trusts may elect to apply a 0% PIE investor tax rate. However, a tax rate of 30% can be applied if requested. Contact your financial or tax professional to discuss the implications.
Do I use the same PIE tax rate for each product I have with AMP?
You may need to supply a different PIE tax rate for reach PIE product you hold with AMP. This is because your ownership of each product may be different, i.e. you may be the trustee, or director of a company, or an individual. Contact your financial adviser or tax profesional to discuss the implications.
My PIR is 0%. How am I taxed?
AMP will provide you with the details of your PIE-allocated income in your Annual PIE Tax Statement. You will need to include this in your tax return. 0% investors should confirm the treatment of PIE income with their tax professional.
We have a joint investment with you, do you need both of us to give you our IRD and PIR details? Why?
Yes, we need both of you to provide us with your IRD and Prescribed Investor Rate details. AMP must ensure that for joint investors we use the highest Prescribed Investor Rate. To ensure this we collect both your Prescribed Investor Rates. If we do not receive Prescribed Investor Rate information for both of you, and we cannot ascertain the highest rate, we must use the default rate of 30 %
Which of AMP’s products are impacted by PIE tax?
The following AMP investment products are impacted by PIE tax:
- AMP KiwiSaver Scheme
- New Zealand Retirement Trust
- AMP Classic Investments
- AMP Premium Investments
Will AMP provide me with a tax certificate or statement?
Yes, once a year, after the end of the financial period AMP will send you a tax statement. Or we will provide you with a tax statement if you fully withdraw your investment from a PIE.
When do you send me a tax certificate or statement?
You will be sent an annual tax certificate by 30 June following the end of the financial period (31 March). We will also send you a tax certificate if you fully withdraw from a PIE fund in an AMP product during the year.
How is my PIE tax calculated?
Each day the total income and expenses earned, and any tax credits received, by a PIE fund are allocated to all of the investors in that fund, based on the proportion of units that each investor holds. Your share of the taxable income and expenses, plus any deductible expenses we have charged you by cancelling units, is multiplied by your PIE investor tax rate. We use your share of any tax credits to reduce your tax liability. If your rate is 0% we will send you details of your income for inclusion in your own tax return.
When do you collect and file my PIE tax?
AMP will collect PIE tax at the end of each tax year. We will also calculate and collect your PIE tax on every redemption of units within your investment. This means we will calculate and collect tax whenever you do a switch out of a fund, rebalance, fund transfer, partial withdrawal or full withdrawal. AMP will file all PIE tax with Inland Revenue at the end of the financial year. If you are fully exiting your investments then AMP will file your PIE tax with Inland Revenue during the month following the exit.
When do I need to have notified you of my PIR and IRD no by?
You have until close of business on the last working day of the financial period (which ends on 31 March) to let us know your Prescribed Investor Rate and IRD number.
If you are fully withdrawing your investment from a PIE you must let us know your correct Prescribed Investor Rate and IRD number at the time of withdrawal.
Why is AMP taking tax off now when it never used to? How was I taxed before? How does my fund pay tax now?
AMP has always had to pay tax on your investments. Previously tax was paid by the fund at the rate of 33%, and the tax payable was included in the unit price. This meant that your return was tax paid when/if you withdrew it, and the only additional tax payable was on distributions from unit trusts if you had a higher marginal tax rate. Now that tax is paid at your Prescribed Investor Rate, it is different for every investor and we are unable to account for tax at a fund level. Tax will no longer be included in unit prices (for PIEs) therefore it must now be deducted at the investor level at your Prescribed Investor Rate.
What do I need to do to remove a joint investor from my investment plan? How will this impact my PIE tax liability?
Generally, AMP requires all current plan owners to complete a Change of Ownership form or they can choose to close the current plan and the new/remaining owner can open a new plan by completing an application form.
Closing the current plan would crystallise the tax liability and the new plan would start afresh. If the owner being removed is on a higher PIR this will reduce the remaining investor’s PIE tax liability. This could be to their advantage. The opposite, removing the owner on the lower PIR will not change their tax liability. The ability to remove a joint investor is also subject to the terms of the constitutional documents governing your investment plan and such documents may have restrictions on your ability to remove a joint investor.
If you are in this situation, you should seek advice from your financial adviser about your options.
What do we do If we want to split our investment plan?
Generally, AMP requires all current plan owners to close the current plan and open two new plans by each completing an application form. This would crystallise the tax liability on the joint investment and the new plans would start afresh. Splitting an investment plan is also subject to the terms of the constitutional documents governing your investment plan and such documents may have restrictions on your ability to split an investment plan.
If you are in this situation, you should seek advice from your financial adviser about your options.
I would like to add a joint owner to my investment plan. How will this affect the PIE tax liability on my investments?
You should check if the constitutional documents governing your investment plan permit you to add a joint owner, and seek advice from your financial or tax professional.
You may have to close your current plan and open a new jointly held portfolio. This ensures the PIE tax liability for the original investor is finalised.
I am going on maternity leave, what do the PIE tax changes mean for me?
Your PIE tax rate (Prescribed Investor Rate) is based on your income in either of the two previous tax years, not on your income in the current tax year. There are no special tax rules for investors on parental leave.
You have said I may need to talk to a tax professional, who would that be for me?
A suitably qualified accountant or Inland Revenue.
Why have AMP changed the way my funds are taxed (changed to PIE)?
The new PIE tax regime is aimed at creating more consistency between the way that people are taxed on investments that they hold directly and investments that they hold through a managed fund. This consistency is effectively achieved in two ways:
- by making all realised gains and losses on all NZ and most listed Australian shares exempt from tax; and
- by enabling income earned by the fund to be allocated and taxed at investors’ tax rates.
Another advantage is that the maximum PIE tax rate is 30 % so investors on a 33% or 38% tax rate will only pay income from managed funds at a maximum rate of 30%. AMP has chosen to make most of its eligible retail products PIEs to provide these tax advantages to investors.
What is a PIE tax rebate?
A PIE tax rebate is basically a refund of tax claimed by PIEs on behalf of investors with a 19.5% or 30% PIE tax rate. Rebates are calculated at the investor level. Rebates occur when deductible expenses exceed taxable income, or where a PIE has allocated more tax credits to an investor than that investor's PIE tax liability. AMP files an annual PIE tax return with Inland Revenue and, if a rebate is due, Inland Revenue will issue a cash tax refund to the PIE. The PIE then issues additional units to investors to whom a rebate is due.
PIE tax rebates may also be claimed from Inland Revenue at the time of a full withdrawal.
How does a 0% investor realise a tax rebate?
You should seek advice from a tax professional or Inland Revenue. Generally you could include any PIE allocated loss or claim the benefit of any additional tax credits through your tax return.
Will I receive a tax rebate?
You should seek advice from a tax professional or Inland Revenue. Generally, whether you receive a tax rebate will depend on a number of factors including:
- the period that you have invested into a PIE and the number of units that you held each day during that period;
- whether the PIE's deductible expenses exceeded its taxable income over the period and the amount of tax credits received by the PIE; and
- your individual PIE investor tax rate.
How will a tax rebate get paid to me?
Current Investors
AMP will issue any tax rebates payable to current investors at the end of the tax year. If a rebate is due, you will receive additional units in your investment fund.
Fully exiting investors
AMP will issue any tax rebates payable to exiting investors during the year. Once your rebate is received it will be paid to the same bank account as the withdrawal. If you are a KiwiSaver member transfering to another provider, the rebate wil be paid to the new provider to pass through to you.
Investors making partial withdrawals
Tax rebates will not be paid on partial withdrawals. If an investor’s PIE tax calculation on a partial withdrawal shows that a rebate is due, no tax will be collected.
How have you worked out my PIE tax liability?
Each day the total income and expenses earned, and any tax credits received, by the PIE fund are allocated to all of the investors in that fund, based on the proportion of units that each investor holds. Your share of the taxable income and expenses, plus any other deductible expenses we have charged you for ongoing management and administration of your investments is multiplied by your PIE Prescribed Investor Rate. We use your share of any tax credits to reduce your tax liability. If your rate is 0% we will report your income to you for inclusion in your own tax return.
I received a PIE tax rebate. Does this mean my investment performed badly?
Please see your financial adviser if you have any questions about the returns on your investment. Generally, the receipt, or otherwise, of a PIE tax rebate provides little indication of the performance of your investment over the period. This is because your PIE tax is only calculated on taxable income, whereas your investment may have generated income that is not subject to tax. For example, your PIE investment may hold an underlying investment in New Zealand shares, on which capital gains and losses are exempt from tax. You should refer to the movement in the gross unit price of your investment, together with your tax position, to get a clearer indication of the performance of your investment.
I am enrolling my children in KiwiSaver. What PIE Tax rate applies for them?
*under 18
*Under age 16
There are currently no special PIE tax rate thresholds or rules for children. The same Prescribed Investor Rate rules apply to all taxpayers.
AMP charges me other fees, how are these treated under the PIE tax rules?
Most fees we charge, outside of the unit price, are tax-deductible fees for ongoing management and administration services. We collect these fees by cancelling your units and we take a deduction for the fee when calculating your PIE taxable income and PIE tax liability. If we have treated a particular type of fee as not deductible we will report this to you so that you can obtain your own tax advice and include the fee in a tax return if appropriate.
I have investment linked / insurance bond investments. What does PIE mean for those investments?
Investment linked and insurance bond investments are not taxed under the PIE rules. However we are able to access tax-free capital gains on Australasian shares for investors in these products.
What is ‘FDR’?
FDR stands for Fair Dividend Rate. This is the method that AMP funds use to calculate taxable income on overseas shares. Generally speaking, 5% of the market value of the overseas shares are treated as taxable income and dividends and capital gains are treated as non-taxable. AMP does this calculation and includes relevant income when calculating PIE tax liabilities.