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Managed investment trusts


The purpose of this article is to discuss the key issues arising out of the current review of the managed investment trust (MIT) taxation regime, the legislative response to which has been deferred. The article examines the Board of Taxation’s report, the government’s response, and the Treasury discussion paper. The article then considers contentious issues in the MIT review, including the need for a clear definition of rights, the treatment of “unders” and “overs”, the arm’s length rule, and the retention of the tax character of amounts flowing through a trust.

The article deals with MIT issues not yet covered in consultation, including attribution methodology, cost base adjustments, interaction with non-resident withholding tax rules, some interim changes to the taxation of trust income, and the concept of the fixed trust. The article concludes with a discussion of current proposals for the reform of the trusts rules in Div 6 of the Income Tax Assessment Act 1936 (Cth).

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Author Photo - Dudley Heywood
Dudley Heywood

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Author Photo - Andrew MILLS
Andrew MILLS
Andrew Mills FTIA (Life) is Managing Director of tax specialist firm Greenwoods & Freehills Pty Limited where he advises clients on a range of domestic and international tax issues, primarily in the financial services sector. His career spans over 25 years and includes periods in the Australian Taxation Office, as well as corporate and professional services organisations. Andrew was President of the Taxation Institute of Australia for 2006/2007 and is also a part time lecturer in the Masters of Law course at the University of Sydney in taxation. He is the Taxation Institute’s representative on Treasury’s Tax Treaties Advisory Panel and has spoken and written on international tax issues in a number of forums.
Current at April 2009
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