Legislation allowing eligible managed investment trusts
(MITs) to elect to have gains from certain
eligible assets treated on capital, rather than revenue account,
was introduced into Parliament on 16 April 20101. This
extended the definition of an MIT for capital account election
purposes beyond the existing narrowly defined MIT
category2 that applied for the purpose of accessing the
reduced withholding tax rules for certain foreign investors in
In line with the Assistant Treasurer's announcement on 10
February 2010 stating that the MIT definition for the purposes of
the withholding tax rules would be aligned to the definition of MIT
for the purposes of the capital account election, on 16 April 2010
the Federal Government also released a draft exposure version of
the Tax Laws Amendment Bill (No. 3) 2010 (Draft
The Draft Bill amends the definition of MIT for withholding tax
purposes to apply to many types of wholesale managed investment
In particular, the Draft Bill proposes that a trust may now be
able to access the reduced withholding tax measures provided the
trust meets certain widely held tests and:
either has an Australian trustee or is controlled in Australia;
is operated and managed in Australia by an Australian financial
This potentially captures a broader range of trusts than
originally proposed given the Draft Bill does not necessarily force
a trust to be registered with ASIC as a registered managed
investment scheme. The requirement to be 'managed in
Australia' is, however, a new requirement.
Also, the Draft Bill specifically excludes trading trusts and
certain closely held trusts from being MITs.
Further amendments to provide further clarity in respect of the
existing regime are also proposed, such as:
recognising investment by pooled superannuation trusts where at
least one member is a widely-held superannuation fund. This will
have the effect of broadening the range of trusts that will qualify
as MITs under the relevant widely held tests, and
contemplating a trust with only one member. This point needs
consideration as a 'managed investment scheme' is defined
under section 9 of the Corporations Act to effectively preclude a
one member trust from being a managed investment scheme.
The Draft Bill also extends the categories of eligible MITs to
certain government-owned managed investment schemes.
The amendments contained in the Draft Bill are stated to become
effective in respect of fund payments made in relation to the first
income starting on or after the first 1 July after the day on which
the Act receives royal assent. Accordingly, it is possible that the
amendments will have retrospective operation. Given this, it is
important that fund managers review and consider their current and
proposed fund offerings in light of the proposed amendments.
Submissions to Treasury commenting on the exposure draft
legislation were due on 23 April 2010.
An actuarial review of the Invensys Australia Superannuation Fund showed it to be in surplus to the tune of $189.2 million. In mid 2003, the Invensys Group proposed to the trustee that the surplus be repatriated to the principal employer in the group.
Lenders in New South Wales breathed a sigh of relief earlier this month when the Supreme Court ruled in Bank of Western Australia Ltd v. Primanzon  NSWSC 862 that two part-time commercial property investors could not claim relief under the Contracts Review Act 1980 (NSW) because the loans advanced to them were entered into in the course of a trade, business or profession carried on by them.
A key aspect of an innovation culture is keeping it active at all levels of management, from teams to board meetings.
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