Govt removes tax impediments for foreign investors
The Government has strengthened the Investment Manager Regime (IMR) to allow foreign investors who invest through a foreign fund or an independent Australian fund manager to be in the same tax position as if it had been invested directly.
In an announcement, Minister for Revenue and Financial Services, Kelly O’Dwyer said the reform would attract foreign investment to Australia and promote the use of Australian fund managers by removing tax impediments to investing in Australia.
“Subject to meeting the appropriate tests, foreign funds that invest via an Australian fund manager are eligible to access IMR concessions in relation to disposal gains and losses, and can disregard certain Australian income tax consequences,” the announcement said.
O’Dwyer’s announcement also clarified treatment under the Attribution Managed Investment Trust tax regime for domestic investors.
The Financial Services Council (FSC) welcomed the amendments and clarifications and said the IMR changes would provide certainty to foreign investors, allow a greater number of trusts to enter, and improve Australia’s international reputation as a globally competitive financial services centre.
FSC chief executive, Sally Loane, said: “There is strong and growing competition to manage money on behalf of foreign investors”.
“A robust Investment Manager Regime, which affords foreign investors the same tax treatment whether they invest in assets directly or via an Australian fund manager, is essential for maintaining Australia’s reputation as an attractive international financial services centre,” Loane said.
On the AMIT regime, Loane said the final remaining barrier to increasing exports of funds management to overseas investors was the complex and high non-resident withholding taxes.
“We look forward to the outcomes of the government’s review of non-resident withholding tax rates for foreign investors into Australian-based funds. We encourage the government to now take the last step and ensure passive income from Australian funds is taxed in an internationally competitive manner,” she said.
The FSC welcomed the AMIT improvements of:
- Proposing to bring investment by platform-based investors into line with the treatment offered to other large-scale superannuation and life insurance investors;
- Certainty for specific types of single-unitholder trusts; and
- Through technical amendments to ensure the regime operates as in intended.
Recommended for you
Global asset manager Janus Henderson could be acquired after receiving a non-binding acquisition proposal jointly from a private investment firm and venture capital firm.
Investment manager Salter Brothers has partnered with private equity firm Kilara Capital to launch an Australian sustainable investment platform focusing on decarbonisation.
Fresh off launching three active ETFs to the Australian market, Avantis Investors is already planning to expand its range with two further products next year.
Ausbil is growing its active ETF range with an ESG product in collaboration with sister company Candriam.
