Last year, the government announced a new tax system for managed investment trusts (MITs) that will reduce complexity, increase certainty and minimise compliance costs for MITs and their investors.  In April, a further announcement was made to defer the start date of the new laws from 1 July 2011 to 1 July 2012.  The government also announced two minor changes to the previously announced measure to facilitate the entry of MITs into the new tax system.

The new tax system will be largely based on recommendations arising from the Board of Taxation review of the taxation arrangements applying to MITs.

Key aspects of the new tax system will be:

• an elective ‘attribution’ system of taxation that will replace the present entitlement system and provide that investors are taxed only on the income that the trustee allocates to them on a fair and reasonable basis, consistent with their entitlements under the trust deed or the trust’s constituent documents
• implementation of rules dealing with ‘under’ and ‘over’ distributions that are within a 5% cap, so that trustees are not required to reissue statements and investors are not required to revisit tax returns removal of double taxation that arises in certain circumstances
• abolition of Division 6B of the Income Tax Assessment Act 1936 which relates to corporate unit trusts.

Click for more information about the taxation of MITs.

The post Deferred date for new tax treatments for managed investment trusts appeared first on AdviserVoice.