“Therefore, to aid the changeover, the government will ensure that the necessary technical changes to the law are enacted at the earliest opportunity.

“The proposed technical changes will focus on problems relating to the PIE tax calculation – including the use of formation losses, how to deal with partial exits by investors, how to deal with switches between investment portfolios within a PIE and the treatment of investor expenses.

"These amendments will ensure that KiwiSaver funds that are PIEs can operate with certainty from the start of the new rules.

“The government also plans to introduce legislation to allow investors in unit-linked life insurance products to have access to some of the benefits of the new PIE rules.

“The proposed changes will allow policyholders in unit-linked life products to be excluded from tax on realised New Zealand and Australian listed equity gains, in the same way that investors in PIEs are excluded.

“Life insurers will be able to choose whether or not to elect into these new rules, which, once enacted, are also expected to take effect from 1 October.

“The changes to the tax treatment of unit-linked life products have emerged from the first stage of the government’s review of the taxation of life insurers and were originally considered at the request of the industry.

“Further changes to achieve greater alignment between the taxation of life insurance products and similar financial products are being considered as part of stage 2 of the review of life insurance tax rules,” they said.