Sherry announces proposed changes to tax treatment of MIT disposals
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Draft legislation on the tax treatment of managed investment trusts disposals will ensure Australia's tax regime remains competitive in attracting foreign funds, said Assistant Treasurer Senator Nick Sherry.
The proposed changes to the taxation of gains and losses on disposal of investments by managed investment trusts (MITs), which were announced in the 2009-10 Budget, will allow an eligible MIT to irrevocably elect capital account treatment for gains and losses on disposal of certain investments during the 2008-09 income year.
Sherry said the changes will provide greater certainty for the managed funds sector as part of "sweeping reforms to the notoriously complex attribution rules, including foreign investment fund and foreign controlled company rules".
"This measure also directly complements the work being led by my Ministerial colleague Chris Bowen through the Australian Financial Centre Forum, to promote Australia as a key financial hub," said Sherry.
He said the funds management industry has over $1.2 trillion in funds under management, and the tax treatment of those funds and the vehicles in which they are held is of high importance.
He said the proposed changes will ensure state operated trusts, as well as wholesale trusts, are also able to qualify for the concession.
"Also, the Government has decided to provide further certainty by specifying the assets to be covered by capital account treatment - these are shares, units and certain land investments."
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