The Government proposes to clarify the tax treatment of instalment warrants by aligning the legislative tax treatment with the industry practice.

A “look through” principle will apply. The investor of the instalment warrant or receipt will be treated as the owner of the asset of the instalment warrant or receipt trust (with some exceptions), instead of the trustee.

This means that the trust is ignored and anything that happens to or results from being the owner of the asset, such as receiving dividends and franking credits, affects the investor and not the trustee.