Attribution managed investment trust member annual (AMMA) statement and standard distribution statement (SDS): guidance notes for trustees 2020

What's new?

Stapled structures

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 (for example, 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%).

Introduction

The 2020 Attribution MIT member annual (AMMA) statement and the standard distribution statement (SDS) are the formats recommended by:

• the Australian Taxation Office (ATO)
• the Financial Services Council (FSC)
• the Australian Custodial Services Association (ACSA)

for disclosure by trusts of tax information to resident and non-resident individuals to complete 2020 tax returns, relevant schedules and other requirements.

This document provides guidance to prepare either an AMMA statement or an SDS. Parts A and B are applicable to both statements however there are two part Cs to cater for the distinct requirements of an AMMA statement and SDS.

Trustees of AMITs must give an AMMA statement within three months of the end of the income year to each person who was a member of an AMIT during the income year. Trustees of non-AMITs should use the SDS for their investors.

Both formats align with the Annual investment income report (AIIR). From 2016–17, all MITs are expected to lodge an AIIR.

The 2020 statements that appear below include example amounts that are referred to in the guidance notes that follow it.

From 2017–18, trustees of MITs must apply the 2011 trust streaming provisions. Prior to 2017–18, the rules applied only if MITs (and other trusts that were treated as MITs) made a choice that they apply. The streaming rules do not apply to AMITs, which are subject to the separate attribution rules that enable capital gains and franked distributions to be attributed to members for tax purposes.

Abbreviations and glossary

AIIR	annual investment income report
AMIT	attribution managed investment trust
AMMA statement	attribution managed investment trust member annual statement
CFC	controlled foreign company
CGT	capital gains tax
Excluded from NCMI amounts	Fund payments that are attributable to income that would be NCMI but for: Subsection 12-437(5) of Schedule 1 to the TAA – Approved economic infrastructure facility exception Section 12-440 of Schedule 1 to the TAA – Transitional – MIT cross staple arrangement income Section 12-447 of Schedule 1 to the TAA – Transitional – MIT trading trust income Section 12-449 of Schedule 1 to the TAA – Transitional – MIT agricultural income Section 12-451 of Schedule 1 to the TAA – Transitional – MIT residential housing income
FITO	foreign income tax offset
IDPS	investor directed portfolio services
ITAA 1936	Income Tax Assessment Act 1936
ITAA 1997	Income Tax Assessment Act 1997
member component	for an AMIT, the investor's member component of a particular character – that is, the amount of the AMIT's determined trust component of that character that is attributable to the member in accordance with section 276-210 of the ITAA 1997
MIT	managed investment trust
net income	for an AMIT – the sum of the trust components of a character relating to assessable income as worked out under sections 276-265 and 276-270 of the ITAA 1997 for a non-AMIT – the net income of the trust calculated under section 95 of the ITAA 1936
non-AMIT	a trust other than an AMIT
NCMI	Non-concessional managed investment trust (MIT) income. A fund payment will be attributable to NCMI if it is: MIT cross staple arrangement income MIT trading trust income MIT agricultural income MIT residential housing income
SDS	standard distribution statement
share	This will depend on the context, however, generally a reference to an investor's share will be: for an AMITs) – the investor's member component(s) of a particular character for a non-AMIT – the investor's share of the net income (or of a component of the net income) determined in accordance with Division 6 and/or Division 6E of Part III of the ITAA 1936
TAA	Taxation Administration Act 1953
TAP	taxable Australian property
TFN	tax file number

Purpose

These notes are designed to help those preparing AMMA statements or SDS understand the basis for the format of the 2020 statement, and the rationale behind the various items disclosed on the statement.

The information contained in these notes and the sample AMMA statement or SDS is not an ATO interpretive advice or a statement of the ATO's interpretation of the taxation laws relevant to the items included in the statement and the notes, their character and calculation of their amounts. These notes do not set out a precedential ATO view.

For more information, see ATO advice and guidance.