June Tip Bits

Portfolio Investment Entity Income

PIE Income now needs to be included in an individuals tax return.    Do you have questions about how this works? See our example below or contact with us with any questions you have.
The IR3 should include the following:
• Total PIE deductions/PIE tax
• Total PIE income/loss
• PIE calculation outcome
Lets say your PIR is 17.5% and your marginal tax rate is 10.5% for 2021.
Your 2021 PIE Income was $2637.54 PIE tax deducted 461.57
The outcome all depends on whether 17.5% was the correct PIR for 2021.
If the rate was correct then the PIE calculation income will be nil ($2,637.54 * 17.5% – 461.57).
However, if your 2021 PIR is greater or less than 17.5% then the PIE tax outcome will either be PIE tax to pay or a refund of PIE tax paid.
When determining a taxpayers PIR, income made in the current year is not taken into account. Therefore, you cannot assume your  2021 PIR is 10.5% based only on your 2021 income. The PIR is based on the previous two income years immediately before the relevant tax year.

So like many tax changes, the rules are a little complex but for further information you can see the IR website about PIR rates.

PIR rates

Contact us now if you have questions or concerns.

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