Rudd’s new investment bias
The Federal Government’s new 7.5 per cent withholding tax has introduced an investment bias towards Australian property trusts, Deloitte announced today.
Deloitte tax partner Adele Watson said the withholding tax rate was welcomed, but will create a bias towards property trusts away from fixed interest investment trusts or holding property through other structures.
“This is because the new 7.5 per cent final withholding tax rate will not apply to Australian sourced interest and unfranked dividends paid, as they will continue to have withholding tax rates ranging from 10 to 30 per cent,” Watson said.
“In addition, as the 7.5 per cent withholding tax rate will only apply to certain property trusts, there will be a bias for non residents to invest in Australian property via these property trusts rather than trusts that do not qualify for the lower withholding tax rate or holding property directly,” she said.
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