SBS CASH PIE (Lifestages Deposit Portfolio)

The SBS Lifestages Deposit Portfolio is suitable for investors who are seeking an account with a competitive rate of return and no fees, all wrapped up in a Portfolio Investment Entity (PIE) structure.  The PIE structure  is a new regime of taxation for qualifying managed funds.

The SBS Lifestages Deposit Portfolio invests primarily in securities issude by SBS.  Investing in a PIE will simplify the administration of your investment.  But best of all, the PIE structure provides tax savings for many investors.  As PIE tax is a final tax, PIE income does not need to be included in your final tax return.

The manager of the SBS Lifestages Deposit Portfolio is FANZ (Funds Administration New Zealand Limited).  FANZ is a subsidiary of SBS and has been in operation since 2002.  FANZ currently has over 250 million in funds under management.

Features of the Portfolio

• Like a term deposit, cash invested in the SBS Lifestages Deposit Portfolio earns a rate of return set in advance.
• No entry or exit fees*
• The fund manager is responsible for paying all fees and costs associated with the administration and compliance of the SBS Lifestages Deposit Portfolio.
• You can invest by making a lump sum investment and / or by making regular contributions.

*There is an exit fee of 1% of the total amount withdrawn should you withdraw an amount within 90 days of opening your account.

Benefits of the Portfolio

• Your investment is pooled with other investors, giving you the potential for better returns through economies of scale.
• You can access your capital at any time
• By investing in a PIE structure, the top tax rate you’ll pay is 30% from 1st April 2008*.  The tax rate you’ll pay is dependent on your PIR.  For more information on PIR click here.

*33% until 31st March 2008..

How PIE works

Investing in a PIE will provide some investors with a significant benefit over holding assets or investments directly.

Income Improvement = $720

To generate the equivalent return through a $100,000 term deposit, an investor who has a marginal tax rate of 39% will need to achieve a 9.18% p.a. return before tax.

*This chart assumes the investor has had income of $38,000 or less in either of the last two income  tax years, but is now earning between $38,000 and $60,000. For further information, please refer to the details under 'What is my PIR (Prescribed Investor Rates)?' section.

Income Improvement = $1,080

To generate the equivalent return through a $100,000 term deposit, an investor, who has earned  $38,000 or less in either of the last two income tax years, but is now earning between $38,000 and $60,000, will need to achieve a 9.62% p.a. return before tax.

The interest rate given is for illustrative purposes only.  The actual rate of return may differ.  Investors  should be aware that future performances of the SBS Lifestages Deposit Portfolio may not reflect the historic performance of the SBS Lifestages Deposit Portfolio.  Repayment of any capital or any particular rate of return is not guaranteed.

How do I invest in SBS Lifestages Deposit Portfolio?

We’re here to help you achieve your financial goals and we’ll work with you to find the best investment product to achieve them.

For more information on PIE tax rates, to request an SBS Lifestages Deposit Portfolio Investment Statement or to talk with one of our Financial Advisers, just phone us on 0800 502 442 or call into your local SBS branch.

What is My PIR (Prescribed investor rates)?

Your PIR is the tax rate that the SBS Lifestages Deposit Portfolio uses to calculate the tax payable on the income of the SBS Lifestages Deposit Portfolio that is attributed to you.  The PIR is based on your taxable income eg: income from salary, wages and any additional sources of income that you would include in your income tax return and the income attributed from any PIE’s in which you invest, including the SBS Lifestages Deposit Portfolio. The SBS Lifestages Deposit Portfolio pays the tax liability on your behalf.

There are 3 PIR’s available.

• 19.5% for investors or underlying investors who are New Zealand residents, who provide their IRD number to the Manager and who have derived, in either of the two years preceding the current tax year, $38,000 per year or less in taxable income (excluding PIE income) and $60,000 or less in total taxable income and PIE income;
• 30% from 1st April 2008 (33% from 1st October 2007) for New Zealand resident individuals who cannot elect the 19.5% tax rate, non-residents and trusts that elect the 33% rate;
• 0% for charities, PIE Companies, portfolio investor proxies, superannuation fund and trusts that elect  the 0% tax rate.

If an investor or underlying investor does not provide a PIR, the default rate is 30% from 1st April 2008 (33% from 1st October 2007 to 31st March 2008).

An advisor statement is available, on request and free of charge from any SBS branch or by calling 0800 502 442.