Amendments to the definition of Managed Investment Trust

The definition of 'managed investment trust' (MIT) in Subdivision 12-H of Schedule 1 of the Tax Administration Act 1953 (TAA) has recently been amended. The amendment was enacted in Schedule 5 of the Tax Laws Amendment (2010 Measures No.3) 2010.

The new MIT definition also applies to the capital treatment rules in Division 275 of the Income Tax Assessment Act 1997 (ITAA 1997)¹.

Who is affected by the change?

This measure applies to both retail and wholesale trusts (whether registered or not) and non-resident investors in such trusts.

What are the changes?

The key changes introduced by the new MIT definition include:

• the extension of the definition to cover wholesale managed investment schemes (MISs) and government-owned MISs
• the exclusion of trading trusts and trusts that carry on trading business
• the exclusion of 'closely-held' trusts
• the modification of the 'widely held' requirements
• the inclusion of a requirement that a substantial proportion of the trusts' Australian assets are managed in Australia
• an expansion of the list of specified entities for the 'widely held' requirements to include foreign government pension plans, sovereign wealth funds and widely held foreign equivalents of a managed investment scheme.

For more information go to Schedule 5 Tax Laws Amendment (2010 Measures No. 3) Act 2010