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 275-20   Widely-held requirements - ordinary case  

275-20(1)  
The trust satisfies the requirements in this subsection in relation to the income year if, at the time the payment mentioned in paragraph 275-10(3)(a) is made, the trust has at least 25 *members.

275-20(2)  
The trust satisfies the requirements in this subsection in relation to the income year if, at the time the payment mentioned in paragraph 275-10(3)(a) is made:


(a) units in the trust are listed for quotation in the official list of an *approved stock exchange in Australia; or


(b) the trust has at least 50 *members (ignoring objects of a trust).

275-20(3)  
For the purposes of subsection (1) and paragraph (2)(b), determine the number of *members of the trust as follows:


(a) first, by applying the rules in subsection (5), identify:


(i) the members of the trust that are not entities covered by subsection (4); and

(ii) the members of the trust that are entities covered by subsection (4);


(b) next, work out the number of members mentioned in subparagraph (a)(i);


(c) next:


(i) work out the *MIT participation interest in the trust of each entity mentioned in subparagraph (a)(ii); and

(ii) for each of those entities, multiply the total of its MIT participation interest in the trust by 50 and round the result upwards to the nearest whole number; and

(iii) work out the total of the results of subparagraph (ii) for all of those entities;


(d) next, work out the total of the results of paragraphs (b) and (c).

275-20(4)  
This subsection covers the following kinds of entity:


(a) a *life insurance company;


(b) a *foreign life insurance company that is regulated under a *foreign law;


(c) a *complying superannuation fund, a *complying approved deposit fund or a *foreign superannuation fund, being a fund that has at least 50 *members;


(d) a *pooled superannuation trust that has at least one member that is a complying superannuation fund that has at least 50 members;


(e) a *managed investment trust in relation to the income year;


(f) an entity:


(i) that is recognised under a foreign law as being used for collective investment by pooling the contributions of its members as consideration to acquire rights to benefits produced by the entity; and

(ii) that has at least 50 members; and

(iii) the contributing members of which do not have day-to-day control over the entity ' s operation;


(g) an entity, the principal purpose of which is to fund pensions (including disability and similar benefits) for the citizens or other contributors of a foreign country, if:


(i) the entity is a fund established by an *exempt foreign government agency; or

(ii) the entity is established under a foreign law for an exempt foreign government agency; or

(iii) the entity is a *wholly-owned subsidiary of an entity mentioned in subparagraph (i) or (ii);


(h) an investment entity that satisfies all of these requirements:


(i) the entity is wholly-owned by one or more *foreign government agencies, or is a wholly-owned subsidiary of one or more foreign government agencies;

(ii) the entity is established using only the public money or public property of the foreign government concerned;

(iii) all economic benefits obtained by the entity have passed, or are expected to pass, to the foreign government concerned;


(i) an entity established and wholly-owned by an *Australian government agency, if the capital of the entity, and returns from the investment of that capital, are used for the primary purpose of meeting statutory government liabilities or obligations (such as superannuation liabilities and liabilities arising from compensation or workcover claims);


(ia) the *Future Fund Board;


(j) a *limited partnership, if, throughout the income year:


(i) at least 95% of the *membership interests in the limited partnership are owned by entities mentioned in the preceding paragraphs of this subsection, or by entities that are wholly-owned by entities so mentioned; and

(ii) the remaining membership interests (if any) in the limited partnership are owned by a *general partner of the limited partnership that habitually exercises the management power of the limited partnership;


(k) an entity, all the membership interests in which are owned by any of the following:


(i) entities mentioned in the preceding paragraphs of this subsection;

(ii) entities that are wholly-owned by entities mentioned in the preceding paragraphs of this subsection;

(iii) entities that are covered under this subsection because of a previous operation of this paragraph;


(l) an entity of a kind similar to an entity mentioned in the preceding paragraphs of this subsection as specified in the regulations.

275-20(4A)  


Any financial assets (within the meaning of the Future Fund Act 2006 ) held by the *Future Fund Board are taken, for the purposes of subparagraph (4)(k)(ii), to be held by the Future Fund Board in its own right.

275-20(5)  
The rules are as follows:


(a) if an entity that is not a trust holds interests in the trust indirectly, through a *chain of trusts:


(i) treat the entity as a member of the trust; and

(ii) do not treat a trust in the chain of trusts as a member of the trust;


(b) do not treat an object of the trust as a member of the trust;


(c) if the trust is mentioned in subparagraph 275-10(3)(d)(i) (trusts with wholesale membership) - do not treat an individual as a member of the trust (other than an individual who became a member of the trust because a financial product or a financial service was provided to, or acquired by, the individual as a wholesale client (within the meaning of section 761G of the Corporations Act 2001 ));


(d) the rules in subsection (7).

275-20(6)  
For the purposes of paragraph (5)(a), treat an entity covered by subsection (4) as an entity that is not a trust.

275-20(7)  
The rules are as follows:


(a) treat the following entities as together being one entity:


(i) an individual;

(ii) each of his or her *relatives;

(iii) each entity acting in the capacity of nominee of an individual mentioned in subparagraph (i) or (ii);


(b) treat the following entities as together being one entity (the notional entity ):


(i) an entity that is not an individual;

(ii) each entity acting in the capacity of nominee of the entity mentioned in subparagraph (i).

275-20(8)  
For the purposes of subsection (5), if the entity mentioned in subparagraph (7)(b)(i) is an entity covered by subsection (4), treat the notional entity as an entity covered by subsection (4).


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