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Exposure Draft - Managed Investment Trusts: Capital Account Treatment Legislation and Explanatory Material


Thursday, 10 December 2009

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The Assistant Treasurer, Senator the Hon Nick Sherry, has released for public consultation the Government's draft Managed Investment Trusts (MITs): capital account treatment legislation, together with explanatory material.

The exposure draft legislation proposes changes to the taxation of gains and losses on disposal of certain investments by Australian MITs, as announced in the 2009-10 Budget. The legislation provides certainty as to the taxation of disposal of shares, units and certain land investments by eligible MITs.

Broadly, the changes will allow an eligible MIT to irrevocable elect capital account treatment for gains and losses on disposal of certain investments with effect from the 2008-09 income year. If an eligible MIT does not elect capital account treatment, then gains and losses on disposals of shares and units will be treated on revenue account.

The changes will also:

  • clarify that distributions or gains on 'carried interest' units in a MIT are treated on revenue account; and
  • prevent the Commissioner from making amendments to assessments of MITs who elect capital account treatment in respect of the re-characterisation of the gains and losses from eligible assets for the income years prior to the application of this measure.

Making a submission

Interested parties are invited to comment on the paper. While submissions may be lodged electronically, by post or by facsimile, electronic lodgment is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment. A request made under the Freedom of Information Act 1982 (Commonwealth) for a submission marked 'confidential' to be made available will be determined in accordance with that Act.

Closing date for submissions: Thursday, 24 December 2009

Address written submissions to:
General Manager
Business Tax Division
The Treasury
Langton Crescent

Email: SBTR@treasury.gov.au

Fax: (02) 6263 4466

Documents Available:

Acrobat (PDF) documents

 Acrobat (PDF)

MITs capital account treatment - Exposure Draft  61.89kb
MITs capital account treatment - Explanatory Material  62.52kb
Consultation Summary  32.87kb

Microsoft Word (RTF) documents

 Microsoft Word (RTF)

MITs capital account treatment - Exposure Draft  209.12kb
MITs capital account treatment - Explanatory Material  275.57kb
Consultation Summary  849.33kb

Related Items:

Submissions: Exposure Draft - Managed Investment Trusts: Capital Account Treatment Legislation and Explanatory Material - 11/02/2010

Treasury received 17 submissions in response to the exposure draft. There were 16 public submissions, and one confidential submission. The submissions that do not contain confidential material are listed below and are accessible by selecting the author.

The opinions expressed in the submissions are those of the authors and do not necessarily reflect the views of the Government or the Treasury.

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