Here is the direct answer. Distributions from the Blossum Wholesale Investment Fund are taxed under PIE rules at your Prescribed Investor Rate (PIR). For NZ resident individuals the PIR is 10.5%, 17.5% or 28%, and 28% is the maximum for individuals, whatever your personal marginal rate.
The rate applies to your share of the fund’s income only, not to your salary or other income, and the tax is calculated and paid within the fund.
The Blossum Wholesale Investment Fund operates as a PIE, targeting a return of 8% p.a. (after fees, before tax), with returns generated from loans secured over NZ property. Returns are not guaranteed and may vary.
PIR stands for Prescribed Investor Rate. It is the tax rate a PIE fund applies to your share of the fund’s income. Your PIR is based on your last two years of taxable income, check with the IRD or your accountant if you’re unsure.
For NZ resident individuals there are three possible rates. In plain English, here is how your income determines which one applies:
| Your PIR | It generally applies if (NZ resident individuals) |
|---|---|
| 10.5% | In either of the last two income years, your taxable income was $15,600 or less, and your taxable income plus PIE income together was $53,500 or less. |
| 17.5% | In either of the last two income years, your taxable income was $53,500 or less, and your taxable income plus PIE income together was $78,100 or less. |
| 28% | Your income was above those thresholds in both of the last two income years. 28% is the default rate and the maximum. |
If you qualify for more than one rate, you can use the lowest rate that applies to you. Once you know your PIR, you give it to the fund along with your IRD number, and the fund applies it to your share of the income.
The 10.5% and 17.5% bands described above are for NZ resident individuals. Non-resident investors generally have a PIR of 28%. Some PIE funds can offer notified foreign investor status, under which eligible non-resident investors may qualify for different treatment on some income. Whether and how that applies depends on the fund and on your circumstances, so obtain professional tax advice before relying on it.
A PIE, Portfolio Investment Entity, is a specific type of New Zealand investment fund structure regulated under the Income Tax Act 2007. When you invest in a PIE fund, the fund itself calculates and pays tax on your share of the returns at your PIR. In practice, that looks like this:
You supply both when you invest. The fund uses your PIR to work out the tax on your share of the income. If you don’t supply them, the default 28% rate applies.
Tax is handled within the fund, you don’t need to include PIE income in your personal tax return. Returns are reported after tax has been applied at your PIR.
Distributions arrive with PIE tax already paid at your PIR. There is no PIE income to add to a personal tax return, and no extra tax return admin for that income, provided you have given the fund your correct PIR and IRD number.
If your marginal income tax rate is 30%, 33% or 39%, your PIR on PIE fund income is still capped at 28%. That means eligible NZ resident individual investors on higher marginal rates pay at most 28% on their share of the fund’s income, even while their salary and other income stay at their normal marginal rates. It is a ceiling, not an exemption: the income is still taxed, just never above 28% for those investors.
No. Everything on this page is general information about how PIE tax and PIR rates work. It does not take your personal circumstances into account and it is not tax, financial or investment advice. Before investing, obtain professional tax advice, and confirm your PIR with the IRD or your accountant.
The rates on this page are for NZ resident individual investors. Trusts, companies and other entities follow different PIR rules. Many entity investors can elect a 0% PIR and account for tax on PIE income through their own tax return, and some trusts can choose other rates. The right election depends on the structure and its tax position, so obtain professional tax advice before investing through an entity.
If your PIR is too low, the IRD can collect the difference through your end of year income tax assessment. If it is too high, the IRD generally refunds the difference the same way. Either way, keeping your PIR up to date with the fund keeps things simple. Confirm your rate with the IRD or your accountant, especially if your income has changed.
Wholesale investors only. Not sure whether you qualify? Take the 2-minute eligibility check.
You now know the rate. If you want the detail behind it, we’ll send you the investor pack for the Blossum Wholesale Investment Fund: the Information Memorandum and the SIPO, which cover the PIE tax treatment, fund terms and the target return in full. No obligation, and our team is available if you want to talk it through.
We use your details to send the investor pack and follow up on your enquiry. We do not sell your data. Wholesale investors only.
Important information.
Wholesale investors only. Past performance is not a reliable indicator of future performance. Returns are not guaranteed and capital is at risk. The information on this page is general in nature and does not constitute financial advice. We recommend seeking independent professional advice before making investment decisions.
Tax outcomes depend on your individual circumstances. The 28% maximum PIR applies to eligible NZ resident individual investors on fund income only, and relies on the correct PIR and IRD number being supplied to the fund. Nothing on this page is tax advice. Confirm your PIR and tax position with your accountant or the IRD.