Govt revisits IMR elements in final piece of puzzle
Federal Government has revisited parts of the Investment Manager Regime (IMR) at the same time as releasing the final element for consultation.
The final element aims to clarify the tax treatment of qualifying widely-held foreign managed funds investing into some Australian assets.
"It will do this by aligning the tax treatment of certain income or gains made on revenue account with the treatment of comparable returns or gains made on capital account," Treasury said.
"It will only apply to funds domiciled in countries that are recognised by Australia as engaging in effective exchange of information."
The final element in the IMR also sought to clarify a number of issues that arose with the first two elements of the regime, which were introduced last year under the Tax Law Amendment (Investment Manager Regime) Act 2012.
Treasury noted particular problems in Element 2 with the operation of the existing widely-held and concentration tests to enable membership interests of the fund to be effectively traced to the underlying investors.
"As I indicated last year, these amendments will also ensure that funds are effectively able to trace through to underlying investors for the purposes of applying the widely-held and closely-held tests," the Minister for Financial Services and Superannuation, Bill Shorten said.
Shorten said the IMR was an important part of the Government's efforts to promote Australia as a financial services centre.
At the same time, Element 2, which exempts the conduit income of a foreign fund's portfolio investment from Australian tax, was also extended to foreign non-portfolio investments of managed funds, Treasury said.
Element 3 completes the IMR and follows through with recommendations by the Australian Financial Centre Forum in a 2009 report.
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