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Whilst the Managed Investment Trust (MIT) regime is still relatively new in the Australian tax landscape, it is important to ensure that all compliance requirements are maintained.  Despite the Governments intentions to create a simplified taxing regime, the MIT provisions can be complex.  Accordingly, it is important to ensure that an MIT governance framework is reviewed regularly to ensure that it complies with the law.

For example, under the MIT regime, an MIT is required to ensure that a substantial proportion of its investment management activities relating to its assets are carried out within Australia, at all times during an income year.  This is an annual requirement that must be satisfied by the on an on-going basis.  “Investment management activities” includes those tasks such as keeping the portfolio under review, identification of potential investments, undertaking market analysis  and the undertaking of due diligence in respect of the MITS future investments.  In order to satisfy this requirement, the proportion of onshore investment management activities within Australia must be “of real importance or value”, “of large size or amount” or “essential” to the MITs overall business.  This requirement is particularly important in today’s economy, with rising costs forcing businesses to outsource certain ‘compliance’ activities offshore, to low cost labour jurisdictions.

For assistance or further information about the governance of your MIT, please contact Justin Epstein +612 8277 0000.