On 16 December 2011, the Federal Government announced the implementation of the third and final element of the Investment Manager Regime (IMR), which, once enacted will apply retrospectively from 1 July 2011.
The proposed IMR changes are intended to remove a major export barrier for Australian-based fund managers, and align the Australian tax treatment of passive portfolio investments with international standards.
In the announcement, the Minister for Financial Services and Superannuation, Bill Shorten stated that “the IMR will provide certainty of tax treatment for the funds management sector, which in Australia has $1.8 trillion of funds under management – $61 billion of which comes from offshore, and will further enhance Australia as a financial services centre in the Asia Pacific region.“
Both Government and the Australian investment management industry have high expectations for the IMR changes to attract more foreign capital and further promote the domestic managed funds industry.
The changes to be implemented under the third IMR element include:
The legislation for the third IMR element is expected to be introduced into Parliament in the first half of 2012, following a consultation process with both industry and tax professionals.