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Edited version of your written advice
Authorisation Number: 1051402182353
Date of advice: 19 July 2018
Ruling
Subject: Foreign investment vehicle as trust
Question 1
Will the Fund be considered a ‘trust’ as identified in the list of entities within subsection 960-100(1) of the Income Tax Assessment Act 1997 (ITAA 1997) for the purposes of Australian tax law?
Answer
Yes.
Question 2
Following Question 1 above, if the Fund is not considered to be a ‘trust’, will it be any other ‘entity’ as defined in subsection 960-100(1) of the ITAA 1997?
Answer
Not required, as the answer to Question 1 has been answered in the affirmative.
Facts and Circumstances
The Fund is a foreign collective investment vehicle that will indirectly hold units in a proposed Australian managed investment trust.
Relevant legislative provision
Income Tax Assessment Act 1997 Subsection 960-100(1)
Reasons for decision
A 'trust' is not defined in the Income Tax Assessment Act 1936 (ITAA 1936) or ITAA 1997. Accordingly, it must be interpreted by application of general law principles, in particular the rules of Equity. A trust is characterised by the existence of the ‘staple ingredients’ of trustee, beneficiary, subject matter that is usually property and ‘personal obligation attaching to the property’. These concepts can be distilled into three elements: being:-
(1) certainty of intention to create a trust:
(2) certainty of subject matter, and
(3) certainty of object: see Korda v Australian Executor Trustees (SA) Ltd (2015).
The Fund satisfies all three elements.
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