On 5 September 2007, the government announced that it is to close two loopholes in the new portfolio investment entity (PIE) tax legislation. The loopholes relate to land-owning companies obtaining tax advantages for their shareholders and the ability of subsidiary companies of a PIE to earn non-passive income.
The policy intent behind the PIE rules is to prevent taxpayers on lower tax rates from being over-taxed on their earnings from passive income e…