If you’re invested in managed funds through Snowball, you may be subject to Portfolio Investment Entity (PIE) tax. This only applies to New Zealand tax residents.
Each year, Adminis (our Custodian) calculates and pays your PIE tax based on income received from PIE funds.
How PIE tax is calculated and paid
At the end of each tax year (31 March), Adminis calculates your PIE tax liability from your PIE fund investments.
Your Prescribed Investor Rate (PIR) is used to determine how much PIE tax you owe.
Adminis deducts the PIE tax directly from your Wallet and pays it to the Inland Revenue (IRD) on your behalf.
If you are due a PIE tax rebate, Adminis will process the rebate and deposit it into your Wallet once received from the IRD.
What happens if there is not enough cash in your Wallet?
If you don't have enough cash available when the PIE tax is due:
Adminis will automatically sell your largest PIE fund holding to cover the tax payment.
We send you advance communications with indicative PIE tax figures to help you prepare and ensure you have sufficient cash available.
Communications you’ll receive
You will receive two key emails regarding your PIE tax:
Heads-up email: sent before the end of March, reminding you to prepare for your PIE tax payment and to check that your PIR is correct.
Indicative PIE tax email: sent in late March, providing your indicative PIE tax amount for the year ending 31 March.
Important dates to keep in mind:
By 10am on 27 March: Ensure your PIR is correct in your Dashboard.
8 April: Cash will be reserved from your wallet to pay your PIE tax.
30 April: PIE tax will be paid to Inland Revenue on your behalf.
If there is not enough cash available in your wallet at the time of reservation, units in your largest PIE fund holding may be sold to meet your tax obligations.
How can I check or update my PIR?
Your PIR depends on your total income in the last two years. You can check which PIR applies to you by using the IRD PIR calculator.
If you need to update your PIR, you can do so directly through your Snowball dashboard.
FIF tax
If you invest in offshore funds (like an AUD-based fund), you may also be responsible for Foreign Investment Fund (FIF) tax separately.
Adminis do not calculate FIF tax for you.
You can generate a holdings report for the 12 months to 31 March to help you calculate your FIF tax with your accountant.
Only offshore holdings are relevant for FIF tax purposes.
Need help?
If you have questions about PIE tax, PIR rates, or tax payments, feel free to contact our team.