Attribution managed investment trust (AMIT) tax return instructions 2020
About these instructions
This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
End of attention
The Attribution managed investment trust (AMIT) tax return instructions 2020 will help you complete the AMIT tax return for 2020. These instructions also cover how to complete schedules that trusts may need to attach to their tax return. The instructions and tax return are not available in print or to download as a PDF.
For instructions on how to lodge the AMIT tax return, see Lodgment.
These instructions will help you complete the Attribution managed investment trust (AMIT) tax return 2020. They are not a guide to income tax law.
When we say you or your business in these instructions, we mean either:
- you as the trustee of the AMIT, or
- you as the registered tax agent responsible for completing the tax return.
References to the AMIT, where applicable, are references to the trustee in their capacity of trustee of the AMIT.
These instructions contain abbreviations for names or technical terms. Each term is spelled out in full the first time it is used. You can also refer to the list of abbreviations.
Disclosure of business tax debt
On 28 October 2019 the Disclosure of business tax debt measure received Royal Assent allowing the ATO to disclose tax debt information of businesses to registered credit reporting bureaus (CRBs). Under this law, from 21 February 2020 the ATO will only be able to disclose tax debt information of a business where certain criteria are met. The Commissioner:
- is not obligated to disclose tax debt information
- will apply administrative safeguards above and beyond the legislative safeguards in the Act and legislative instrument, before reporting the tax debt information of a business.
Measures were introduced to address risks posed by arrangements involving stapled structures and to limit access to concessions currently available to foreign investors for passive income. A stapled structure is an arrangement where two or more entities that are commonly owned (at least one of which is a trust) are bound together, such that interests in them (e.g. shares or units) cannot be bought or sold separately. For more information, see Stapled structures.
The following changes took effect from 1 July 2019:
- A 30% managed investment trust (MIT) withholding tax is applied to trading income that is converted to passive income via a stapled structure or distributed by a trading trust, and to income from agricultural land and residential housing (other than affordable housing)
- Tax exemptions for foreign pension funds and sovereign wealth funds are limited to passive income and portfolio-like investments only (typically interests of less than 10%).
Non-concessional MIT income (NCMI)
MIT withholding tax applies to fund payments made by a withholding MIT to foreign residents. For recipients in an exchange-of-information country, the rate of MIT withholding tax was 15%. From 1 July 2019, the MIT withholding tax rate became 30% to the extent that the fund payment is attributable to non-concessional MIT income (NCMI).
Subject to certain exceptions, an amount of a fund payment will be NCMI if it is attributable to income that is:
- MIT cross staple arrangement income
- MIT trading trust income
- MIT residential housing income, or
- MIT agricultural income.
Transitional rules apply to appropriately protect existing arrangements from the impact of the amendments. If the transitional rules apply, the concessional MIT withholding tax rate of 15% (for recipients in exchange of information (EOI) countries) will continue to apply for the relevant transitional periods. New, approved, economic infrastructure projects may also be concessionally taxed.
What is Excluded from NCMI?
From 1 July 2019 certain income derived by sovereign entities from portfolio-like interests in MITs (or Australian companies) is non-assessable non-exempt income that is also exempt from withholding tax. However the exemption does not apply to NCMI or amounts that are Excluded from NCMI. 'Excluded from NCMI' amounts are amounts that are attributable to income that would be NCMI but for:
- Approved economic infrastructure facility (subsection 12-437(5) of Schedule 1 to the TAA 1953)
- Transitional – MIT cross staple arrangement income (section 12-440 of Schedule 1 to the TAA 1953)
- Transitional – MIT trading trust income (section 12-447 of Schedule 1 to the TAA 1953)
- Transitional – MIT residential housing income (section 12-451 of Schedule 1 to the TAA 1953)
- Transitional – MIT agricultural income (section 12-449 of Schedule 1 to the TAA 1953).
For more information see Stapled Structures
A new tax system for managed investment trusts
The Tax Laws Amendment (New Tax System for Managed Investment Trusts) Act 2016 allows an eligible managed investment trust (MIT) to choose to apply the AMIT regime. The choice to apply it and become an AMIT is irrevocable.
The AMIT regime includes the following features:
- AMITs apply an attribution method of taxation in lieu of the present entitlement to income method
- AMITs may carry forward under- and over-attribution amounts into a later year, generally without adverse taxation consequences
- AMITs are deemed to be fixed trusts
- adjustments may be made to decrease or increase the cost base of members' unit holdings in an AMIT to eliminate double taxation that may otherwise arise
- AMITs (and other MITs) are subject to an arm’s length rule that aims to ensure that related entities undertake transactions between one another in a manner that reflects commercial dealings.
AMIT technical amendments
Since 12 March 2019 the Treasury Laws Amendment (2018 Measures No. 5) Act 2019
- clarifies the operation of the income tax law applying to AMITs
- makes a number of modifications.
Features of this tax return
The Attribution Managed Investment Trust (AMIT) Tax Return 2020 is tailored to the specific aspects of the AMIT regime for MITs. Some features of this tax return include:
- electronic-only lodgment via Standard Business Reporting (SBR)
- streamlined information requirements compared to the Trust income tax return
- reduced statement of distribution requirements; specifically, the trustee is only required to complete information on foreign resident members in respect of which the trust is not a withholding MIT and the trustee is liable to pay an amount
- automated assessment process, including where the trustee is liable to pay an amount.
When you lodge this tax return, we issue a comprehensive notice of assessment (NOA) where a trustee is liable to pay an amount. Specifically, the NOA will provide details of trustee assessment in respect of:
- amounts of tax the trustee is required to pay on behalf of foreign resident members (for AMITs that are not withholding MITs)
- amounts of tax the trustee is required to pay in its own right.
Ceasing to be an AMIT
A trust that was an AMIT for an income year but is not eligible to be an AMIT in a later income year ceases to be an AMIT. In that case, the trust may need to lodge a trust or other tax return for that later income year.
If you are not eligible to be an AMIT for 2019–20, do not lodge an AMIT tax return. You should instead lodge:
- a 2019–20 Trust tax return, or
- a 2019–20 Company tax return if Division 6C applies to you.