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:
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:
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.
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.