What is the “PIE tax” regime?

The BCF Scheme is a PIE (portfolio investment entity). This means that members will only pay tax on their investment earnings from the Scheme at “PIE tax rates” of 10.5%,17.5% or 28% depending on their own personal income levels in the last two completed income years (1 April to 31 March).

You must advise the Administration Manager of your IRD number and PIE tax rate when joining the Scheme (pages 21 and 22 of the Investment Statement provides the necessary guidance). If you do not do both, then your PIE tax rate will be 28%.

Each year the income earned by the BCF Scheme on its investments will be attributed to you in proportion to your savings balance, and we will pay tax on that income at your PIE tax rate by deducting it from your balance. If the BCF Scheme were not a PIE then all members would pay tax at the rate of 28% on all investment income.