Supplementary Order Paper No 477

No 477

House of Representatives

Supplementary Order Paper

Tuesday, 10 March 2020

Taxation (KiwiSaver, Student Loans, and Remedial Matters) Bill

Proposed amendments

Andrew Bayly, in Committee, to move the following amendments:

Clause 2

In clause 2(15), after Sections (page 14, line 13), insert 99(1B), 104BA,.

In clause 2(22) (page 15, line 2), replace 99, with 99 (except for subsection (1B)),.

Clause 99

After clause 99(1) (page 61, after line 15), insert:

(1B)

After section HM 60(4), insert:

When chosen rate higher than rate in sections HM 56 to HM 58

(4B)

If an investor advises or otherwise has a notified investor rate that is greater than their prescribed investor rate (actual PIR rate) that would apply under sections HM 56 to HM 58,—

(a)

the income attributed to them by the PIE is excluded income of the investor under section CX 56 (Attributed income of certain investors in multi-rate PIEs):

(b)

the amount calculated by the following formula is a refundable tax credit:

income attributed to the investor by the PIE × (notified investor rate − actual PIR rate).

New clause 101B

After clause 101 (page 63, after line 24), insert:

101B Section LA 6 amended (Remaining refundable credits: PAYE, RWT, and certain other items)

After section LA 6(1)(f), insert:

(fb)

section LS 1A (Investor tax credit):

New clause 104BA

After clause 104 (page 38, after line 20), insert:

104BA New section LS 1B inserted (Investor tax credit)

After section LS 1, insert:

LS 1B Investor tax credit
Tax credit

(1)

An investor in a multi-rate PIE has a tax credit for a tax year for the amount determined under section HM 60(4B)(b) (which relates to an investor having a notified investor rate that exceeds the prescribed investor rate).

Amount of credit

(2)

The amount of the tax credit equals the amount determined under section HM 60(4B)(b).

Explanatory note

This Supplementary Order Paper amends the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Bill. It inserts new subsection (4B) into section HM 60 so that an investor in a multi-rate PIE who advises (or otherwise has) a notified investor rate that is greater than their actual PIR rate will be treated as receiving excluded income, but with a refundable tax credit for the amount of overpaid PIE tax. The effect is that the calculation of the investor’s taxable income will not be affected (and so there will not be any impact on calculations for the purposes of student loans, child support, or Working for Families tax credits), but there will be a refundable credit for the investor. This rule will apply from the commencement of the 2018-19 tax year.

Consequential amendments to section LA 6 and inserting new section LS 1B provide a mechanism for the refundable tax credit.