Yesterday’s release by the Board of Taxation of its much anticipated discussion paper on the review of tax arrangements applying to managed investment trusts has been welcomed by the industry.
Deloitte Wealth Management tax partner Adele Watson said while the nature of trusts and their investors had changed over time, the tax rules have not kept up.
“There is a whole chapter of the discussion paper devoted to the treatment of investments held by managed trusts and whether they should be taxed on the capital gains account or the revenue account,” Watson said. “This is one of the most critical issues facing the industry.”
The purpose of the review is to provide options for introducing a specific tax regime for managed investment trusts and in doing so, reduce its current complexity and minimise compliance costs.
The closing date for submissions raised in the discussion paper is December 19, 2008. The board will then conduct its review and report back to the Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, Chris Bowen, by the middle of next year with its recommendations.
Copies of the board’s discussion paper are available from www.taxboard.gov.au.