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 and 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.
Investing in a PIE will provide some investors with a significant benefit over holding assets or investments directly.
Investment |
Interest Rate |
Interest |
Tax Rate |
Tax $ |
Net Income |
$100,000
Term Deposit |
5.25% |
$5,250 |
33% |
$1,732 |
$3,517 |
$100,000 PIE |
5.25% |
$5,250 |
28% |
$1,470 |
$3,780 |
Income Improvement = $337
To generate the equivalent return through a $100,000 term deposit, an investor who has a marginal tax rate of 33% will need to achieve a 5.64% 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 Bank branch.
What is my PIR (Prescribed investor rates)?
The Portfolio is a Portfolio Investment Entity (“PIE”). This allows the Manager to pay tax on your behalf. Under current tax laws, the Manager will calculate and pay tax on your behalf at one of the following prescribed investor rates (“PIR”):
- 10.5% if you are a New Zealand resident individual and your taxable income (other than PIE income) was $14,000 or less and your combined taxable and PIE income was $48,000 or less in either of the previous two income years.
- 17.5% if you are a New Zealand resident individual and:
- your taxable income (other than PIE income) was $14,000 or less and your combined taxable and PIE income was more than $48,000 but not more than $70,000 (and you do not qualify for the 12.5% rate) in either of the previous two income years; or
- your taxable income (other than PIE income) was more than $14,000 but not more than $48,000 and your combined taxable and PIE income was $70,000 or less in either of the previous two income years.
- 28% if you are a New Zealand resident individual and:
- your taxable income (other than PIE income) was more than $48,000 in both the previous two income years;
- your combined taxable and PIE income was more than $70,000 in both the previous two income years; or
- you have not provided an IRD number or have not elected a prescribed investor rate of 12.5% or 21%.
- 28% if you are non-resident.
- 0%, 17.5%, or 28% for all trusts, at their choice, and also 10.5% for testamentary trusts who so choose.
- 0% or 28% for companies or for charitable trusts.
You are required to provide FANZ with your IRD number and tell FANZ the correct PIR to use. You are also required to advise FANZ if your correct PIR changes. If you do not advise FANZ of a change, or provide the wrong PIR, you may have an obligation to file a tax return and pay further tax as well as penalties and interest, or may have more tax deducted from your investment than is necessary.
An advisor statement is available, on request and free of charge from any SBS Bank branch or by calling 0800 502 442.