In media release No 2013/151, issued 5 August 2013, the Assistant Treasurer, David Bradbury, announced two further changes to the proposed new tax system for managed investment trusts (MITs) in response to issues raised by the MIT industry in the course of consultation.
The changes relate to the under or over attribution of net income that is in excess of the de minimis threshold as well as the application of the proposed arm's length rule, which is aimed at preventing the circumvention of the eligible investment business (EIB) rules and protecting the corporate tax base.
To address these issues, the Government will:
- allow an under or over attribution of net income in excess of the de minimis that is not caused intentionally by the trustee to be carried forward, subject to certain integrity measures; and
- carve out certain services from the application of the proposed arm's length rule between a MIT and an associate of the MIT.
Further detail on the changes can be found in the Attachment to the media release. These changes will be reflected in the exposure draft legislation.