ASIC relief for registered schemes to implement the AMIT regime

AMIT Regime

On 5 May 2016, the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Act 2016 (AMIT Act), which establishes a new tax system for managed investment trusts (MITs), received Royal Assent. The rules under the AMIT Act (AMIT Regime) apply from 1 July 2016 unless the trustee of the MIT chooses to apply the rules from 1 July 2015.

In order for trustees of MITs (both registered and unregistered) to transition to the new AMIT Regime, the trustees of MITS will need elect to apply the new taxation regime and consider any necessary amendments to their constitutions to allow for the implementation of the AMIT Regime.

ASIC Relief for registered schemes

On 2 June 2016, ASIC issued a media release indicating that it will grant general relief to responsible entities of registered MITs to facilitate an easier transition into the AMIT Regime (ASIC Relief). We expect to have the ASIC Relief released on or before 22 June 2016.

Subject to the conditions specified below, the ASIC Relief will:

• allow responsible entities to make changes to their constitutions to ensure that they can operate or implement the AMIT Regime without automatically holding a members’ meeting; and
• relieve responsible entities from the duty under section 601FC(1)(d) of the Corporations Act 2001 (Cth) to treat members who hold interests of the same class equally to the extent that it prevents an attribution being made in accordance with the AMIT Regime.

The ASIC Relief will reduce uncertainty and costs associated with holding a members’ meeting and the requirements under the Corporations Act 2001 (Cth) in relation to making amendments to the constitution of a registered scheme.

Conditions of the ASIC Relief

In order to rely on ASIC Relief, responsible entities will need to post a statement on their website explaining that:

• they intend to amend the constitution, the reasons for this and the effect of the amendments; and
• members can make a request within seven days that a meeting be called and give an email address for members to make this request.

If five per cent or more of the total number of members request a meeting within seven days of the statement being posted on the website, a members’ meeting will be required to approve the amendments.

If no members’ meeting is required after seven days since the statement was posted on the website, responsible entities can make the amendments  to their constitutions without the need for member approval.

What’s next?

If responsible entities want to choose to apply the AMIT Regime from 1 July 2015, they will need to seek legal and tax advice with respect to next steps and check the ASIC Relief when it is released.

Trustees of unregistered MITs cannot rely on the ASIC Relief and need to consider the amending powers of their trust deeds.

One Investment Group

One Investment Group is one of Australia’s leading providers of responsible entity and trustee services with in excess of 200 funds and $10 billion under administration. Should you be considering appointing a responsible entity or trustee, please contact us.