Trustees and portfolio investment entities (PIEs).
Prescribed investor rates (PIR) for trusts
Resident trustees investing in a multi-rate PIE (MRP) must collectively choose a prescribed interest rate. The trustees can choose either:
- 28% as a final tax.
- 17.5% and have income and tax paid included in the return.
- 10.5% if the trust is testamentary with income and tax paid included in the return.
- 0% and have the income or loss and tax credits flow through to the trust return.
Trustees of superannuation funds cannot choose 10.5%.
Trustees of charitable trusts can only notify 0%.
If a PIR is not provided by the trust, the default rate of 28% will apply. This default rate is not the same as notifying at 28%.
Income attributed by the MRP
A trust’s MRP income must be included in a tax return if you’ve either:
- Chosen a PIR of 0%, 10.5% or 17.5%.
- The trust has been zero-rated.
- Had the default rate of 28% applied.
Losses cannot be included in trust returns if you choose 10.5% or 17%.
If the trust and the MRP have standard 31 March balance dates, the year in which the MRP attributes the income and the trust receives it will be the same.
Dividends or distributions received from an MRP are excluded income and are not included in the trust’s tax return.
If a trust’s income is taxed at the notified 28% PIR it is not included in the tax return.
For all other PIRs the income is included in the trust return and if applicable be allocated as beneficiary income or remain as trustee income.