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Managed Investment Trusts

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. See details of legislation 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


This page was last modified on 2021-08-23