On 18 June 2018, the Federal Government released an Exposure Draft (ED) for the Treasury Laws Amendment (2018 Measures No. 5) Bill 2018. The ED contains a number of technical amendments to the Attribution Managed Investment Trusts (AMIT) regime which are designed to address the various teething issues that have been raised in respect of the operation of the regime.
The ED proposes the following changes to the AMIT regime:
- AMIT eligibility – MITs with a single unitholder will be eligible as an AMIT if the only member is a specified widely-held entity.
- Calculating rounding adjustments – in calculating rounding adjustments and trustee shortfall tax for the character of discount capital gains, both the determined trust component and the determined member component will be calculated on the discounted amount.
- Net amount of adjustments to give rise to CGT event E10 – where a member of an AMIT receives non-assessable distributions from the AMIT and the cost base of the membership interest cannot be reduced to nil (as it was already nil), the net amount of adjustments will give rise to a capital gain under CGT event E10.
- CGT amounts included in non-assessable payments – where capital gains that have been applied against capital losses, these will be included in the amount of non-assessable payments.
- Fund payments to include capital losses from non-taxable Australian property – in calculating a fund payment of a MIT or AMIT, capital losses from non-taxable Australian property which have been applied against capital gains from taxable Australian property will be added back.
- TFN withholding rules – amounts which have already been subject to TFN withholding will not be subject to the TFN withholding rules for AMITs.
- Franking credits for former public trading trusts and corporate unit trusts – former public trading trusts and corporate unit trusts will now be permitted to distribute franking credits to beneficiaries until 30 June 2018, provided that the distribution is paid out of income derived on or before 1 July 2016.
- Election into the AMIT regime for MITs with substituted accounting periods – MITs with substituted accounting periods will now be able to elect into the AMIT regime for the 2016-17 income year and later income years.
Submissions in respect of the ED are required by 16 July 2018.