Garrison Bridge is a Portfolio Investment Entity (PIE) for tax purposes. This means NZ residents are taxed on the investment returns at 10.5%, 17.5% or 28%. There is no tax on withdrawals.
Non New Zealand tax residents may qualify as notified foreign investors and apply a zero tax rate.
For Australian investors, and foreign investors, this effectively means that there is:
- A zero-rate tax on investment returns
- A zero-rate tax on lump sum or income withdrawals
This situation arises due to the structure of the fund (it is a NZ Superannuation Fund), and the double tax treaty between NZ/Australia.
What is a PIE fund?
A Portfolio Investment Entity (PIE) is an entity, such as a managed fund that invests the contributions from investors in different types of investments, in this case, the Protector Plus funds. PIE funds pay tax on investment income based on the Prescribed Investor Rate (PIR) of their investors, rather than at the entity's tax rate.
Garrison Bridge is registered as foreign investment zero-rate PIE. This allows eligible members to invest with their personal PIR rate or a 0% PIR.
New Zealand resident investors will use their PIR rate. However, if you are a NZ transitional resident, or a notified foreign investor and invest in a foreign investment zero-rate PIE, you may qualify for the 0% PIR.
Non-NZ residents may have tax obligations in their country of residence and should seek professional tax advice. For more information about the tax consequences, see the ‘Tax’ document on the offer register.