Managed Investment Trusts

The government announced [19 July 2017] some streamlining and a number of technical amendments designed to improve the Managed Investment Trust regime.

See AMIT technical amendments

Managed Investment Trusts can invest in affordable housing

[2017-18 Budget Update – May 2017] The government has announced a move to allow Managed Investment Trusts to invest in affordable housing, to take effect from 1 July 2017.  Subject to conditions, the concessionary final withholding tax rate of 15% would apply to income and capital gains returns. Follow progress of the implementation of these measures here: Affordable Housing Incentives

Managed Investment Trust New Rules From 1 July 2015

The Tax Laws Amendment (New Tax System for Managed Investment Trusts) Bill 2015 and associated Bills introduce a new tax system for managed investment trusts with effect from 1 July 2016.

Eligible trustees can also make an irrevocable choice to have the new tax system take effect from the earlier date of 1 July 2015.

The changes to extend the list of entities qualifying as eligible investors for the purpose of the widely held requirements apply on or after 1 July 2014.

The changes now being introduced were first foreshadowed by the former government in the then Assistant Treasurer’s Media Release of 7 May 2010 – a response to a report by the Board of Taxation’s on the taxation of Managed Investment Trusts.

The broad purpose of the new system is to remove complexity from the taxation of large, or widely held trusts from the trust provisions of the Tax Act which were designed at a time before large commercial trusts were commonly used.

Key features

Features of the new rules include:

  • Managed Investment Trusts to be treated as fixed trusts
  • adoption of an ‘attribution model’ of taxation, simplifying the character flow-through treatment of income and tax credits, and reducing potential double taxation from cost-base calculations
  • an ‘unders and overs’ regime to allow (optionally) variances of trust income to be adjusted in the income year in which the variance is discovered without the need for amending income tax returns of either the trust or its members

Corporate Collective Investment Vehicles

Under proposals published by Treasury for a new form of ‘corporate collective investment vehicle’ entity, they are to be treated similarly to managed investment trusts for tax purposes. Key features would include attribution and flow-through taxation for investors.

See Treasury consultations

References

ATO – Law Companion Guidelines – Managed Investment Trusts

 

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This page was last modified on 2019-05-16