INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-25 - PARTICULAR KINDS OF TRUSTS  

Division 275 - Australian managed investment trusts: general  

Subdivision 275-A - Meaning of managed investment trust  

Operative provisions

SECTION 275-10   Meaning of managed investment trust  

275-10(1)  
A trust is a managed investment trust in relation to an income year if any of the following requirements are met:


(a) the trust is covered under subsection (3) of this section in relation to the income year (ordinary case);


(b) the trust is covered under section 275-45 in relation to the income year (only members of trust are managed investment trusts etc.).

275-10(2)  
A trust is also a managed investment trust in relation to an income year if any of the following requirements are met:


(a) the trust is covered under section 275-50 in relation to the income year (no fund payment made in relation to the income year);


(b) the trust is covered under section 275-55 in relation to the income year (temporary circumstances outside the control of the trustee).

275-10(3)  
A trust is covered under this subsection in relation to an income year if:


(a) at the time the trustee of the trust makes the first *fund payment in relation to the income year, or at an earlier time in the income year:


(i) the trustee of the trust was an Australian resident; or

(ii) the central management and control of the trust was in Australia; and


(b) the trust is not a trust covered by subsection (4) (trading trust etc.) in relation to the income year; and


(c) at the time the payment is made, the trust is a managed investment scheme (within the meaning of section 9 of the Corporations Act 2001 ); and


(d) at the time the payment is made:


(i) the trust is covered by section 275-15 (trusts with wholesale membership); or

(ii) if the trust is not covered by section 275-15 - the trust is registered under section 601EB of the Corporations Act 2001 ; and


(e) the trust satisfies, in relation to the income year:


(i) if, at the time the payment is made, the trust is registered under section 601EB of the Corporations Act 2001 and is covered by section 275-15 - either or both of the widely-held requirements in subsections 275-20(1) and 275-25(1) ; or

(ii) if, at the time the payment is made, the trust is so registered and is not covered by section 275-15 - either or both of the widely-held requirements in subsections 275-20(2) and 275-25(1) ; or

(iii) if, at the time the payment is made, the trust is not so registered and is covered by section 275-15 - the widely-held requirements in subsection 275-20(1) ; and


(f) the trust satisfies the closely-held restrictions in subsection 275-30(1) in relation to the income year; and


(g) if the trust is covered by section 275-15 at the time the payment is made - it satisfies the licensing requirements in section 275-35 in relation to the income year. Trading unit trust or other trust carrying on trading business etc. cannot be managed investment trust

275-10(4)  
A trust is covered by this subsection in relation to an income year if:


(a) in the case of a unit trust - the trust is a trading trust for the purposes of Division 6C of Part III of the Income Tax Assessment Act 1936 in relation to the income year; or


(b) in any other case - the trust at any time in the income year:


(i) carried on a trading business (within the meaning of that Division); or

(ii) controlled, or was able to control, directly or indirectly, the affairs or operations of another person in respect of the carrying on by that other person of a trading business (within the meaning of that Division).

275-10(4A)  


In determining whether a trust is covered by subsection (4), disregard any interest that the trust has in a *VCLP or an *ESVCLP unless:


(a) the trust is a *general partner of the VCLP or ESVCLP; or


(b) the trust has *committed capital in the partnership that, taken together with the sum of the amounts of committed capital in the partnership of any of that partner ' s *associates (other than associates to whom subsection (4B) applies), exceeds 30% of the partnership ' s committed capital.

275-10(4B)  


This subsection applies to:


(a) an *ADI; or


(b) a *life insurance company; or


(c) a public authority:


(i) that is constituted by a law of a State or internal Territory; and

(ii) that carries on life insurance business within the meaning of section 11 of the Life Insurance Act 1995 ; or


(d) a widely-held complying superannuation fund within the meaning of section 4A of the Pooled Development Funds Act 1992 ; or


(e) a *widely held foreign venture capital fund of funds.

Crown entities etc.

275-10(5)  
For the purposes of paragraphs (3)(d) and (e), treat an entity as registered under section 601EB of the Corporations Act 2001 at the time the payment is made if at that time the trust is operated by:


(a) an entity that would, but for subsection 5A(4) of that Act (about the Crown not being bound by Chapter 6CA or 7 of that Act), be required under that Act to be a financial services licensee (within the meaning of section 761A of that Act) whose licence would cover operating such a managed investment scheme; or


(b) an entity that:


(i) is a *wholly-owned subsidiary of an entity of a kind mentioned in paragraph (a); and

(ii) would, but for any instrument issued by ASIC under that Act that has effect in relation to the entity and operation of the scheme mentioned in paragraph (3)(c), be required under that Act to be a financial services licensee (within the meaning of section 761A of that Act) whose licence would cover operating such a managed investment scheme.
Start-up and wind-down phases

275-10(6)  
Treat the requirements in paragraphs (3)(e) and (f) as being satisfied if:


(a) the trust is created during the period:


(i) starting 12 months before the start of the income year; and

(ii) ending at the end of the income year; or


(b) the trust ceases to exist during the income year, and was a *managed investment trust (disregarding paragraph (a) of this section) in relation to the previous income year.


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