Budget measures provide strong platform for Australian managed funds industry: IFSA
The attractiveness of investing in Australia will improve following capital gains tax and foreign investment fund measures announced in the Federal Budget that will provide a strong platform for the Australian managed funds industry, according to Investment and Financial Services Association (IFSA) deputy chief executive, John O’Shaughnessy.
Australian managed funds will be able to elect to be taxed on capital account, which will ensure that investors in managed funds remain on an even footing, O’Shaughnessy said.
Investors and the industry can now operate with the certainty that managed funds will continue to benefit from the 50 per cent capital gains tax (CGT) discount on assets held for more than 12 months, according to an IFSA statement.
IFSA said the measure provided certainty to international investors that they will not be taxed on capital gains arising out of most passive investments made by Australian managed funds.
“This measure improves the perceived competitiveness of Australian managed funds and therefore the attractiveness of investing in Australia at a time when increased capital flows are required to stimulate investment and economic growth,” O’Shaughnessy said.
In addition, the Budget announcement that the foreign investment fund rules will be repealed will ensure that Australian investors are no longer disadvantaged by investing in offshore managed funds, according to IFSA.
“This measure will effectively expand the fund choice available to Australian investors and provide important compliance savings to the industry and investors,” O’Shaughnessy said.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
