The attribution method provides greater certainty for trustees and beneficiaries of managed investment trusts (MITs) by aligning the commercial and tax consequences of the activities of a MIT and providing flow-through of income and tax offset amounts with particular tax characteristics.
The attribution method will apply to those MITs that elect into the system and become an attribution MIT (AMIT).
Under the attribution method, the trustee must:
- determine each amount having a particular income or tax offset character for the trust
- attribute amounts with particular characters to members on a fair and reasonable basis in accordance with the constituent documents of the trust.
Unit holders of an AMIT (that is, the trust beneficiaries) are referred to as 'members'.