Section HM 6 — Income Tax Act 2007: Intended effects for multi-rate PIEs and investors

HM 6 Intended effects for multi-rate PIEs and investors Intended effects for entity (1) The intended effects for an entity that is using funds supplied by investors to make investments of certain types and that meets the requirements for multi-rate PIE status are that— (a) in relation to proceeds of the investments that are attributed to investors who are natural persons or certain trustees, the PIE has a tax liability— (i) calculated using a tax rate for each investor; and (ii) resembling the total tax liability the group of investors would have if the investors were to make the investments separately: (ab) in relation to proceeds of the investments that are attributable to notified foreign investors in a foreign investment PIE, the PIE has a tax liability— (i) calculated using a tax rate that is appropriate having regard to the income source and investment type; and (ii) resembling the tax liability of the investor if they were to make the investment directly: (b) the PIE has no tax liability on proceeds of the investments that are attributed to other investors: (c) the PIE allocates to each investor amounts resembling the amounts that the investor would receive, after allowing for the tax paid by the PIE if making the investment separately. Intended effects for investors (2) The intended effects for an investor in the multi-rate PIE are that— (a) the investor has no tax liability on income arising from proceeds for which the PIE has a tax liability, unless— (i) the investor has given the PIE a rate that is lower than the correct rate: (ii) the investor has been treated by a foreign investment PIE as a notified foreign investor for a period in which they do not in fact meet the requirements of section HM 55D for notified foreign investor status: (b) the investor is liable for tax on any assessable income arising from proceeds for which the PIE has no tax liability: (c) the investor receives on the investment in the PIE an economic return that the investor would receive after payment of tax liabilities if personally making investments similar to those made by the PIE in which they have an investor interest. Defined in this Act: amount , assessable income , foreign investment PIE , investor , investor interest , multi-rate PIE , notified foreign investor , pay , PIE , tax , trustee Compare: 2007 No 97 s HL 1(2)(a) Section HM 6: inserted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 292(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section HM 6(1)(a): amended (with effect on 1 April 2010), on 29 August 2011 (applying for the 2010–11 and later income years), by section 54(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section HM 6(1)(ab): inserted, on 29 August 2011 (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 54(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section HM 6(2)(a): substituted, on 29 August 2011 (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 54(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section HM 6(2)(b): amended (with effect on 1 April 2010), on 21 December 2010 (applying for the 2010–11 and later income years), by section 87(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section HM 6 list of defined terms foreign investment PIE : inserted, on 29 August 2011, by section 54(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section HM 6 list of defined terms notified foreign investor : inserted, on 29 August 2011, by section 54(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).