Australia streamlines tax for Managed Investment Trusts 10 May 2010 The Australian Government has streamlined the tax system for Managed Investment Trusts (MITs). In making the announcement, the Assistant Treasurer, Senator Nick Sherry, said that changes ‘amount to a complete re-write of how MITs are taxed – a new system for MITs.’ He said that the $120 million overhaul of the MIT tax system will remove longstanding investor uncertainty in the interaction of Australian tax and trust law, and added that the changes will enhance Australia as a financial services hub. Some key features are: - The provision of an elective ‘attribution’ system of taxation to replace the present entitlement system.
- Investors will be taxed only on the income that the trustee allocates to them on a fair and reasonable basis, consistent with their entitlements under the trust deed or the trust’s constituent documents.
- The ability to deal with ‘over or under’ distributions within a five per cent cap has been established so that trusts are not required to reissue statements and investors are not required to revisit tax returns.
- Double taxation has been removed.
- Division 6B of the Income Tax Assessment Act 1936, which relates to corporate unit trusts, has been abolished.
The new system will commence on 1 July 2011. The full report is available at www.taxboard.gov.au. More information |