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Inland Revenue

Tax Policy

Tax credits and losses – investor return adjustment

Issue: Investor interest adjustment


(33 – Investment Savings and Insurance Association of NZ Inc, 60 – ASB)

The rules for adjustments to investors’ interests or to distributions in section HL 7 of the Income Tax Act 2007 (section HM 48 of the rewritten provisions in the bill) should be amended to require a PIE to adjust an investor’s interest or a distribution to reflect the investor’s prescribed investor rate within a reasonable time period – that is, that no specific date be prescribed in the legislation.

Inland Revenue support material should advise that a “reasonable time period” would include payment made by the later of 30 June or 60 days of receipt of a PIE rebate for a PIE in a net-rebate position.

The provision that causes the PIE to lose its PIE status because it has not met the investor interest adjustment requirement should be removed.


Officials agree that PIE status should not automatically be lost when this requirement is not satisfied within the required time period. This issue can be addressed with a provision allowing the Commissioner to extend the period within which this requirement must be met.

The amendment should apply from 1 April 2008.


That the submissions be accepted in part, subject to officials’ comments.