Edited version of private advice

Authorisation Number: 1052022473974

Date of advice: 31 August 2022

Ruling

Subject: Superannuation fund for foreign residents - withholding tax exemption

Question 1

Are the Pension Funds excluded from liability to withholding tax on their interest and/or dividend income derived through Foreign Trust from its investment(s) in accordance with paragraph 128B(3)(jb) of the Income Tax Assessment Act 1936 (ITAA 1936)?

Answer

Yes.

This ruling applies for the following period:

1 July 20xx to 30 June 20xx

The scheme commences on:

1 July 20xx

Relevant facts and circumstances

Foreign Trust is a trust acting on behalf of the Pension Funds.

The Pension Funds that invest via Foreign Trust are Pension Plans.

The Pension Funds are administered by ForCo through a Plan Administrator located in Country X.

Pension Fund members must be a former or current ForCo employee.

Members or employers do not make contributions to the Pension Funds or Foreign Trust.

The Pension Funds are defined benefit plans, which are overfunded and benefits are paid out of current assets.

Members do not own units in Foreign Trust. They have an accrued benefit with a cash balance.

Entitlements to beneficiaries leave the trust and flow through the plan account and are then distributed to the member.

The Recordkeeper accounts for employee benefit accruals.

The Pension Funds are exempt from taxation under Country X law.

The Country X Tax Authority has confirmed that Foreign Trust is exempt from Country X taxation, and is a Country X tax resident.

Foreign Trust is created and organised in Country X and is maintained at all times as a trust in Country X.

The Pension Funds and Foreign Trust are indefinitely continuing funds.

There is a mechanism for Foreign Trust to be wound up or terminated. ForCo expects to continue the Pension Funds but reserves the right to amend or terminate the Pension Funds, in whole or in part, at any time by the resolution of the Board of Directors or its properly authorised designee.

The Pension Funds and Foreign Trust were established in a foreign country (i.e. Country X).

Foreign Trust was established and maintained only to provide benefits for the Pension Funds. The Pension Funds were established and are maintained only to provide benefits for individuals who are not Australian residents.

The central management and control of Foreign Trust and the Pension Funds are carried on outside Australia by entities none of whom are Australian residents.

An amount paid to or set aside for Foreign Trust or ultimately for the Pension Funds has not been and cannot be deducted under the ITAA 1997 or ITAA 1936, and a tax offset has not been allowed and is not allowable for such an amount.

The income received by the Pension Funds and Foreign Trust is not non-assessable non-exempt income because of Subdivision 880-C of the ITAA 1997 or Division 880 of the Income Tax (Transitional Provisions) Act 1997.

Australian investments

Foreign Trust acquires shares from a third party, which are placed with Global Custodian and Local Sub-custodian. Dividends are paid from asset gross to Local Sub-custodian. Withholding tax withheld by Local Sub-custodian and paid to ATO. Net dividend is paid to account at the Global Custodian and then is available for use (to, for example, buy new shares).

Foreign Trust has invested in Australian equity investments.

Foreign Trust derives dividend income from the investments.

These equity investments all have the following characteristics:

a.    All investments are in entities listed on the Australian Securities Exchange (ASX).

b.    The Pension Funds and Foreign Trust hold less than 10% of the total participation interests in each Australian company, trust or real estate investment trust (REIT).

c.     The Pension Funds and Foreign Trust would hold less than 10% of the total participation interests in each Australian company, trust or REIT in the circumstances detailed in paragraph 128B(3CC)(b) of the ITAA 1936.

d.    Neither the Pension Funds and Foreign Trust, nor any related party of the Pension Funds and Foreign Trust, has involvement in the day to day management of the business of any of the Australian companies, trusts or REITs.

e.    Neither the Pension Funds and Foreign Trust, nor any related party of the Pension Funds and Foreign Trust, has the right to appoint a director to the Board of Directors of the Australian company, or equivalent role in a trust or REIT.

f.      Neither the Pension Funds and Foreign Trust, nor any related party, holds the right to representation on any investor representative or advisory committee (or similar) of the Australian company, or equivalent role in a trust or REIT.

g.    Neither the Pension Funds and Foreign Trust, nor any related party, has the ability to direct or influence the operation of the Australian company, trust or REIT outside of the ordinary rights conferred by the equity interest held.

h.    The Pension Funds and Foreign Trust only hold rights to vote in proportion to its equity interest in each Australian company, trust or REIT.

Benefits

The Pension Funds pay the following types of benefits to their members:

a.    Retirement benefit;

b.    Return of contributions on separation of company.

Benefits are paid out as lump sums or reoccurring payments.

Defined benefits cannot be accessed by active employees.

For separated employees, there are roll over benefits which would be subject to tax penalties. When accessed prior to retirement age, tax penalties apply unless the funds are rolled over into another retirement vehicle and only accessed upon reaching retirement age.

The Recordkeeper distributes benefits directly to members.

Relevant legislative provisions

Income Tax Assessment Act 1936 paragraph 128B(3)(jb)

Reasons for decision

Broadly, paragraph 128B(3)(jb) of the ITAA 1936 provides an exclusion from withholding tax for interest, dividends and non-share dividends derived by a superannuation fund for foreign residents (subject to the satisfaction of certain conditions).

For the exclusion to apply, the interest, dividend and/or non-share dividend income must be:

•                    derived by a superannuation fund for foreign residents (as defined in section 118-520 of the ITAA 1997), and

•                    exempt from income tax in the country in which the superannuation fund for foreign residents arise.

Further, from 1 July 2019, the extra requirements in subsection 128B(3CA) of the ITAA 1936 must also be met.

The requirements for the exemption from withholding tax under paragraph 128B(3)(jb) of the ITAA 1936 will be discussed below.

The Pension Funds are non-residents

Each of the Pension Funds is not a resident of Australia for income tax purposes. The Pension Funds were all established in Country X.

Therefore, the Pension Funds satisfy this requirement.

The Pension Funds are superannuation funds for foreign residents

Superannuation fund for foreign residents is a defined term in the ITAA 1936. Subsection 6(1) of the ITAA 1936 states:

superannuation fund for foreign residents has the meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997.

Subsection 995-1(1) of the ITAA 1997 sets out the following:

superannuation fund for foreign residents has the meaning given by section 118-520.

Section 118-520 of the ITAA 1997 states the following:

(1)          A fund is a superannuation fund for foreign residents at a time if:

(a)          at that time, it is:

(i)            an indefinitely continuing fund; and

(ii)           a provident, benefit, superannuation or retirement fund; and

(b)          it was established in a foreign country; and

(c)           it was established, and is maintained at that time, only to provide benefits for individuals who are not Australian residents; and

(d)          at that time, its central management and control is carried on outside Australia by entities none of whom is an Australian resident.

(2)          However, a fund is not a superannuation fund for foreign residents if:

(a)  an amount is paid to the fund or set aside for the fund has been or can be deducted under this Act; or

(b)  a *tax offset has been allowed or is allowable for such an amount.

Consequently, for the Pension Funds to each be considered superannuation funds for foreign residents for the purposes of paragraph 128B(3)(jb) of the ITAA 1936, it must be established that:

•                    each Pension Fund is an indefinitely continuing fund

•                    each Pension Fund is a provident, benefit, superannuation or retirement fund

•                    each Pension Fund was established in a foreign country

•                    each Pension Fund was established and is maintained only to provide benefits for individuals who are not Australian residents

•                    the central management and control of each of the Pension Funds is carried on outside of Australia by entities none of whom are Australian residents

•                    no amount paid to the Pension Funds or set aside for the Pension Funds has been or can be deducted under the ITAA 1997, and

•                    no tax offsets have been allowed or would be allowable for an amount paid to the Pension Funds or set aside for the Pension Funds.

The Pension Funds are indefinitely continuing funds

The legislation provides no guidance on the meaning of 'indefinitely continuing'. It is not a technical legal expression, and the ordinary meanings of indefinitely and continuing involve little ambiguity or controversy.

The Macquarie Dictionary, [Online], viewed on 1 February 2018, www.macquariedictionary.com.au defines 'indefinitely' and 'continuing' as follows:

Indefinite:

adjective 1. not definite; without fixed or specified limit; unlimited: an indefinite

number

2. not clearly defined or determined; not precise.

-       indefinitely, adverb

Continue:

verb (Continued, continuing)

1.    to go forwards or onwards in any course or action; keep on.

2.    to go on after suspension or interruption.

3.    to last or endure.

4.    to remain in a place; abide; stay.

5.    to remain in a particular state or capacity

The Pension Funds and Foreign Trust are indefinitely continuing.

There is a mechanism for Foreign Trust to be wound up or terminated. ForCo expects to continue the Pension Funds but reserves the right to amend or terminate the Pension Funds, in whole or in part, at any time by the resolution of the Board of Directors or its properly authorized designee.

There is sufficient evidence to accept that each of the Pension Funds will continue to operate for an indefinite period of time.

Therefore, the Pension Funds satisfy this requirement.

Each of the Pension Funds is a provident, benefit, superannuation or retirement fund

In Scott v. FCT (No. 2) (1966) 40 ALJR 265; 14 ATD 333, Windeyer J stated (40 ALJR 265 at 278; 14 ATD 333 at 351):

There is no definition in the Act of a superannuation fund. The meaning of the term must therefore depend upon ordinary usage, the attributes of a thing thus denominated being those which things ordinarily so described have...the connotation of the phrase in the Act must be determined by one's general knowledge of the extent of the denotation of the phrase in common parlance...I have come to the conclusion that there is no single attribute of a superannuation fund established for the benefit of employees except that it must be a fund bona fide devoted as its sole purpose to providing for employees who are participants money benefits (or benefits having a monetary value) upon their reaching a prescribed age.

In Mahony v Commissioner of Taxation (1967) 41 ALJR 232; (1967) 14 ATD 519, Kitto J stated:

There was no definition in the Act of 'a provident, benefit or superannuation fund', and the meaning of the several expressions must therefore be arrived at in light of ordinary usage and with only one piece of assistance to be gathered from the immediate context. Since a fund, if its income was to be exempt under the provision, was separately required to be one established for the benefit of employees, each of the three descriptive words 'provident', 'benefit' and 'superannuation' must be taken to have connoted a purpose narrower than the purpose of conferring benefits, in a completely general sense, upon employees. Precise definition may be difficult, and in any case is unnecessary for present purposes. All that need be recognized is that just as 'provident' and 'superannuation' both referred to the provision of a particular kind of 'benefit' - in the one case a provision against contemplated contingencies, and in the other case a provision, to arise on an employee's retirement or death or other cessation of employment, of a subvention for him or his estate or persons towards whom he may have stood in some kind of relation commonly giving rise to a legal or moral responsibility - so 'benefit' must have meant a benefit, not in a general sense, but characterized by some specific future purpose. A funeral benefit is a familiar example.

ATO Interpretative Decision ATO ID 2009/67 Income Tax: Superannuation fund for foreign residents (ATO ID 2009/67) refers to these authorities to provide guidance on the meaning of the phrase 'provident, benefit, superannuation or retirement fund':

None of the four descriptors 'provident', 'benefit', 'superannuation' or 'retirement fund' in subparagraph (a)(ii) of the definition of 'superannuation fund for foreign residents' in section 118-520 of the ITAA 1997 are defined. The terms have, however, been the subject of judicial consideration.

The courts have held that for a fund to be a 'provident, benefit, superannuation or retirement fund', the fund 's sole purpose must be to provide superannuation benefits, that is, benefits to a member upon the member reaching a prescribed age or upon their retirement, death or other cessation of employment (Scott v. FC of T (No 2) (1966) 14 ATD 333; (1966) 10 AITR 290, per Windeyer J; Mahony v. FC of T (1967) 14 ATD 519, per Kitto J; Walstern Pty Ltd v. Commissioner of Taxation (2003) 138 FCR 1; 2003 ATC 5076; (2003) 54 ATR 423, per Hill J and Cameron Brae Pty Ltd v. Federal Commissioner of Taxation (2007) 161 FCR 468; 2007 ATC 4936; (2007) 67 ATR 178, per Stone and Allsop JJ).

Therefore, the Plan satisfies subparagraph (a)(ii) of the definition of 'superannuation fund for foreign residents' in section 118-520 of the ITAA 1997.

The above guidance establishes that for a fund to qualify as a provident, benefit, superannuation or retirement fund, it must have the sole purpose of providing retirement benefits or benefits in other allowable contemplated contingencies (such as death, disability or serious illness).

The Pension Funds provide retirement and separation from employment benefits to members. The Pension Funds also provide for the return of benefits to members on separation from employment, and the transfer of funds to other pension plans upon termination of employment.

For separated employees, there are roll over benefits which would be subject to tax penalties.

When accessed prior to retirement age, tax penalties apply unless the funds are rolled over into another retirement vehicle and only accessed upon reaching retirement age.

The Pension Funds are defined benefit schemes where the benefits paid to the relevant contributor are calculated based on a number of factors.

There are no benefits drawn from the Pension Funds to member beneficiaries beyond those as prescribed above.

The Commissioner accepts that the alternate circumstances of access to the funds, being incapacity, death, the transfer of funds to another retirement fund, and a return of contributions in very limited circumstances, align to the contemplated contingencies of a provident, benefit, superannuation or retirement fund.

All monies of the Pension Funds are amounts used solely for the purposes of administering and paying out benefits.

Therefore, the Pension Funds satisfy this requirement.

The Pension Funds was established in a foreign country

Each of the Pension Funds were established in and are tax residents of Country X.

Therefore, the Pension Funds satisfy this requirement.

The Pension Funds were established and are maintained only to provide benefits for individuals who are not Australian residents

Each of the Pension Funds was established in Country X for its members, being certain eligible ForCo employees.

It is considered that the possibility of a very small number of members being returned residents or becoming Australian residents after ceasing eligible employment is incidental.

Therefore, the Pension Funds will satisfy this requirement.

Each of the Pension Funds' central management and control is carried on outside Australia by entities none of whom is an Australian resident

Paragraphs 20 and 21 of Taxation Ruling TR 2008/9 Income tax: meaning of 'Australian superannuation fund' in subsection 295-95(2) of the Income Tax Assessment Act 1997 (TR 2008/9) states in respect of the central management and control (CM&C) of a superannuation fund:

20. The CM&C of a superannuation fund involves a focus on the who, when and where of the strategic and high level decision making processes and activities of the fund. In the context of the operations of a superannuation fund, the strategic and high level decision making processes includes:

•                    formulating the investment strategy for the fund;

•                    reviewing and updating or varying the fund's investment strategy as well as monitoring and reviewing the performance of the fund's investments;

•                    if the fund has reserves - the formulation of a strategy for their prudential management; and

•                    determining how the assets of the fund are to be used to fund member benefits.

21. The other principal areas of operation of a superannuation fund that form part of the day-to-day or operational side of the fund's activities will not constitute CM&C. These activities do not form part of the CM&C of the fund because they are not of a strategic or high level nature. Rather, these activities are of a more formalistic or administrative nature. Examples of such activities include the acceptance of contributions that are made on a regular basis, the actual investment of the fund's assets, the fulfilment of administrative duties and the preservation, payment and portability of benefits.

Furthermore, paragraphs 10 and 11 of Taxation Ruling TR 2018/5 Income tax: central management and control test of residency (TR 2018/5) states:

10. Central management and control refers to the control and direction of a company's operations. It does not refer to a physical location in which the control and direction of a company is located and may ultimately be exercised in more than one location.

11. The key element in the control and direction of a company's operations is the making of high-level decisions that set the company's general policies and determine the direction of its operations and the type of transactions it will enter.

The CM&C of Foreign Trust and the Pension Funds are carried on outside Australia by entities none of whom are Australian residents.

Based on these facts, it is clear that all of the key functions of each of the Pension Funds are exercised in Country X, including the control and direction of each of the Pension Funds' investments, strategies, administration, and operations. As such it is reasonable to conclude that the central management and control of each of the Pension Funds is exercised in Country X by entities that are not Australian residents.

Therefore, the Pension Funds satisfy this requirement.

No amount paid to the Pension Funds or set aside for the Pension Funds has been or can be deducted under the ITAA 1997 and no tax offset has been allowed or is allowable for such an amount

An amount paid to the Pension Funds or set aside for the Pension Funds has not been and cannot be deducted under the ITAA 1997. A tax offset has not been allowed nor would be allowable for any amount paid to the Pension Funds or set aside for the Pension Funds.

Therefore, the Pension Funds satisfy this requirement.

Consists of interest or dividend and/or non-share dividends paid by a company that is a resident

Paragraph 128B(3)(jb) of the ITAA 1936 will only apply to interest, or to dividends and non-share dividends paid by Australian resident companies.

Subsection 128A(3) of the ITAA 1936 is also relevant. It states:

For the purposes of this Division, a beneficiary who is presently entitled to a dividend, to interest or to a royalty included in the income of a trust estate shall be deemed to have derived income consisting of that dividend, interest or royalty at the time when he or she became so entitled.

The operation of subsection 128A(3) of the ITAA 1936 will enable interest, dividend and non-share dividend income paid by an Australian resident company and derived by a trust estate to retain its character in the hands of a beneficiary of that trust estate. Further, the beneficiary will be deemed to have derived the relevant type of income under paragraph 128B(3)(jb) of the ITAA 1936 at the point in time that the beneficiary becomes presently entitled to that income.

In order to be excluded from withholding tax under paragraph 128B(3)(jb) of the ITAA 1936, the interest, dividend and/or non-share dividend income must be derived by a non-resident superannuation fund for foreign residents.

Foreign Trust, with its presently entitled Pension Fund beneficiaries, will receive dividend income from its investments in the entities. These entities are residents of Australia for tax purposes.

Therefore, the Pension Funds satisfy this requirement.

Is exempt from income tax in the country in which the non-resident resides

The Pension Funds are exempt from Country X income tax.

The Country X Tax Authority has provided a letter stating that Foreign Trust is exempt from Country X taxation, and is a Country X tax resident.

Therefore, the Pension Funds satisfy this requirement.

Subsection 128B(3CA) of the ITAA 1936

The Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019 introduced extra requirements that must be met for paragraph 128B(3)(jb) of the ITAA 1936 to apply. Generally, these extra requirements apply to income derived from 1 July 2019.

Relevantly:

•                     The Pension Funds must satisfy the 'portfolio interest test' in relation to the test entity (subsection 128B(3CC) of the ITAA 1936)

•                     The Pension Funds must satisfy the 'influence test' (subsection 128B(3CD) of the ITAA 1936) in relation to the test entity, and

•                     The income cannot otherwise be non-assessable non-exempt income of the Fund because of:

a.    Subdivision 880-C of the ITAA 1997, or

b.    Division 880 of the Income Tax (Transitional Provisions) Act 1997.

1. The Pension Funds satisfy the 'portfolio interest test'

Subsection 128B(3CC) of the ITAA 1936 states:

A superannuation fund satisfies the portfolio interest test in this subsection in relation to the test entity at a time if, at that time, the total participation interest (within the meaning of the Income Tax Assessment Act 1997) the superannuation fund holds in the test entity:

(a) is less than 10%; and

(b) would be less than 10% if, in working out the direct participation interest (within the meaning of that Act) that any entity holds in a company:

(i) an equity holder were treated as a shareholder; and

(ii) the total amount contributed to the company in respect of non-share equity interests were included in the total paid-up share capital of the company.

The portfolio test only applies to the Pension Funds' Australian equity interests.

Foreign Trust holds less than 1% of the total participation interests in each Australian company, trust or real estate investment trust (REIT). Therefore, the Pension Funds hold less than 10% of the total participation interests in each Australian company, trust or REIT. Further, the Pension Funds would hold less than 10% of the total participation interests in each Australian company, trust or REIT in the circumstances detailed in paragraph 128B(3CC)(b) of the ITAA 1936.The Pension Funds therefore satisfy the 'portfolio interest test' in respect of their current investments.

2. The Pension Funds satisfy the 'influence test'

Subsection 128B(3CD) of the ITAA 1936 states:

A superannuation fund has influence of a kind described in this subsection in relation to the test entity at a time if any of the following requirements are satisfied at that time:

(a) the superannuation fund:

                             i.                is directly or indirectly able to determine; or

                            ii.                in acting in concert with others, is directly or indirectly able to determine;

the identity of at least one of the persons who, individually or together with others, make (or might reasonably be expected to make) the decisions that comprise the control and direction of the test entity's operations;

(b) at least one of those persons is accustomed or obliged to act, or might reasonably be expected to act, in accordance with the directions, instructions or wishes of the superannuation fund (whether those directions, instructions or wishes are expressed directly or indirectly, or through the superannuation fund acting in concert with others).

As such, there are two distinct sub-tests within the influence test.

Sub-test 1 of the influence test, as contained in paragraph 128B(3CD)(a) of the ITAA 1936, assesses whether the Pension Funds are able to determine the identity of at least one of the persons who, individually or together with others, makes or is reasonably expected to make, decisions comprising the control and direction of the test entity's operations. This includes situations where the Pension Funds are able to act in concert with others to determine the identity of a relevant decision-maker in the test entity.

Law Companion Ruling LCR 2020/3 The superannuation fund for foreign residents withholding tax exemption and sovereign immunity (LCR 2020/3) states in paragraph 18 that the phrase 'acting in concert' was considered by Finkelstein J in Papua New Guinea Dockyard Limited v Adams [2005] FCA 413 at [13]:

'Many of the important cases that discuss the meaning of acting in concert are helpfully collected by Barrett J in Bateman v. Newhaven Park Stud Ltd (2004) 49 ACSR 597. These cases show that a person, A, will be acting in concert with another person B, if A engages in conduct (act or omission) in consequence of an agreement or understanding between A and B and the conduct is in pursuance of an objective or purpose which is common to both. It is not as is sometimes suggested necessary to show that the common objective or purpose "has some pejorative element [such as] to circumvent the letter, or perhaps even the spirit, of some other statutory obligation or requirement.'

Whether the relevant entity in acting in concert with others is able to appoint a relevant decision-maker requires an examination of all the relevant facts and circumstances. There must be some form of arrangement or understanding, whether explicit or otherwise, under which they are acting (or have agreed to act) in pursuing a common objective.

Example 2 in LCR 2020/3, describing a situation where two unrelated parties use a common investment manager, and Example 4.7 of the Explanatory Memorandum, demonstrate that the acting in concert requirement with respect to the influence test has a low threshold. Relevantly, both of these examples show that where investors aggregate their interests with other investors (using a common investment manager) and gain rights, and exercise said rights, to appoint decision-makers in the test entity, this is sufficient to find that all investors satisfy the influence test.

Given that Foreign Trust makes the investments on behalf of all the Pension Funds together, the question would be whether the Pension Funds could, either in part or in whole, or via their group trustee Foreign Trust, determine the identity of such a relevant decision-maker.

Given the above points, sub-test 1 therefore may also extend to situations where the Pension Funds or Foreign Trust, in their own right, hold the ability to approve or veto decisions which go to the control or direction of the test entity.

Sub-test 2 of the influence test, as contained in paragraph 128B(3CD)(b) of the ITAA 1936, assesses whether at least one of the relevant decision-making persons of the test entity is accustomed or obliged to act, or might reasonably be expected to act, in accordance with the directions, instructions or wishes of the Pension Funds either alone or acting in concert as represented by Foreign Trust.

Relevantly, in respect of the equity investments:

a.    All investments are in entities listed on the Australian Securities Exchange (ASX).

b.    The Pension Funds and Foreign Trust hold less than 10% of the total participation interests in each Australian company, trust or REIT.

c.     The Pension Funds and Foreign Trust would hold less than 10% of the total participation interests in each Australian company, trust or REIT in the circumstances detailed in paragraph 128B(3CC)(b) of the ITAA 1936.

d.    Neither the Pension Funds and Foreign Trust, nor any related party of the Pension Funds and Foreign Trust, has involvement in the day to day management of the business of any of the Australian companies, trusts or REITs.

e.    Neither the Pension Funds and Foreign Trust, nor any related party of the Pension Funds and Foreign Trust, has the right to appoint a director to the Board of Directors of the Australian company, or equivalent role in a trust or REIT.

f.      Neither the Pension Funds and Foreign Trust, nor any related party, holds the right to representation on any investor representative or advisory committee (or similar) of the Australian company, or equivalent role in a trust or REIT.

g.    Neither the Pension Funds and Foreign Trust, nor any related party, has the ability to direct or influence the operation of the Australian company, trust or REIT outside of the ordinary rights conferred by the equity interest held.

h.    The Pension Funds and Foreign Trust only hold rights to vote in proportion to its equity interest in each Australian company, trust or REIT.

Based on the above, the Commissioner accepts that the Pension Funds do not have influence of a kind described in subsection 128B(3CD) of the ITAA 1936.

3. Otherwise non-assessable non-exempt

The income received by the Pension Funds will not be non-assessable non-exempt income because of Subdivision 880-C of the ITAA 1997 or Division 880 of the Income Tax (Transitional Provisions) Act 1997.

Conclusion

The Pension Funds are excluded from withholding tax in relation to interest, dividend and non-share dividend income derived through Foreign Trust from its current investments.

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