Under the changes enacted in May 2016, an eligible MIT may elect into the attribution MIT regime and become an AMIT.
MITs that elect to be an AMIT are:
- allowed to use an attribution method of tax (in lieu of the existing present entitlement to income method in Division 6 of the ITAA 1936)
- allowed to carry forward under- and over-estimates of tax amounts into the discovery income year, generally without adverse tax consequences
- deemed as fixed trusts if they meet eligibility requirements.
If you are a MIT trustee, the AMIT regime allows you to choose to apply the attribution rules for an income year starting on or after 1 July 2015. The way a MIT’s tax return is prepared for that income year will be sufficient evidence of the making of the choice.
Furthermore:
- unit holders in AMITs are allowed to make, in certain circumstances, both upward and downward adjustments to the cost base of their unit holdings to eliminate double taxation that may otherwise arise
- there is an arm’s length rule for all MITs that aims to ensure related entities undertake transactions between one another in a manner that reflects commercial dealings
- the 20% tracing rule for public unit trusts in Division 6C of the ITAA 1936 has been amended so it does not apply to super funds and exempt entities that are entitled to a refund of excess imputation credits.