Govt aims to close stapled structure tax loophole

turnbull government tax

27 July 2018
| By Nicholas Grove |
image
image
expand image

The Turnbull Government said it is tightening the rules on stapled structures that have been used by foreigners to reduce the tax paid on the income they earn from their Australian investments.

Staples can present an unintended tax loophole available only to foreign investors and are usually used to invest in property, Treasurer Scott Morrison said.

Draft legislation released by the Turnbull Government shuts down this unintended tax concession by neutralising the tax benefits of certain stapled structures and tightening concessions available to foreign investors such as foreign sovereign wealth funds and pension funds, he said.

The legislation also promotes more investment in affordable housing by allowing foreign investors access to the concessional managed investment trust (MIT) rate if they invest in affordable housing, Morrison said.

MITs will also be able to be used to invest in residential housing provided they do so primarily for rental purposes. However, access to conventional tax rates will only be extended to the income from such investment derived from affordable housing, he said.

The revised exposure draft also includes draft legislation to prevent foreign investors from accessing concessional MIT tax rates on agricultural land, he said.

“These reforms demonstrate the Turnbull Government’s continued action to protect the integrity of Australia’s corporate tax system and to ensure that foreign investors pay their fair share of tax,” Morrison said.

The exposure draft legislation and explanatory materials are available on the Treasury website and the Government has encouraged all interested parties to make a submission by 10 August, 2018.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 1 week ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

1 month 1 week ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

3 months 1 week ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

5 days 23 hours ago

Lonsec has appointed a new chief executive for its research and ratings division as Mike Wright takes up a new role in light of the acquisition of Evidentia Group by Lons...

1 month ago

The Financial Services and Credit Panel has cancelled the registration of an NSW adviser for two years as it felt he displayed a ‘level of incompetence’ in providing advi...

3 weeks 6 days ago

TOP PERFORMING FUNDS