Optional look-through rules for PIEs

Section HM 6B of the Income Tax Act 2007

The legislation has been amended to ensure that when a retail foreign investment variable-rate PIE invests into a wholesale foreign investment PIE, the flow-through rules work appropriately.

Background

The rules are intended to allow retail PIEs to treat amounts that are derived by wholesale PIEs as if they had been derived by the retail PIE. Similarly, the rules are intended to allow expenditure incurred by the wholesale PIE to be treated as if it had been incurred by the retail PIE.

The wording of section HM 6B has been clarified to ensure that the rules achieve these results.

Application date

The amendment applies from the 2012-13 income year - the start-date for foreign investment variable-rate PIEs.