1. Managed Investment Trust and its latest
reforms – A boon or a bane
Managed Investment trust is a type of unit trust. These trusts can be created as retails and
wholesale trusts and can be registered. MIT is primarily done to reduce the rate of withholding tax
on distribution of net rental income and gains of capital. There are individual tax rules for these
kinds of trust. Primarily prevalent in Australia, all MIT's have a standard treatment irrespective of
whether they are whole sale or retail or they are registered or non-registered. The withholding tax
rate may be increased or decreased in every budget session which is discussed. There have been
several changes in the laws pertaining to managed investment trust since its inception.
Based on the recent budget there are new tax rules which have been proposed and will be
applicable from July 2015. Each MIT will be taxable under their own regime and they will not be
treated equally. There have been several changes announced in the taxation structure and reporting
changes which will have to be complied by these trusts. The range of the investors who will receive
concession has been increased paving way for more trusts and investors. This will also lead to a
massive increase in the financial services industry which in turn paves the way for a healthier
economy. It is not at all predictable that the conception of the eligible investment in case of business
which is used to settle on whether or not any of the unit trust that holds to municipal is actually a
trading trust which will be redefined.
There are several investors in Australia who have their savings in Managed Investment trust. Most
of them have invested their almost all the retirement savings which makes these funds highly critical
as well as important. There have also been tax exemption rules clearly carved out for managed
investment trusts and entities which are subsidiaries or form a part of these trusts. This decision
which is actually made by the Government is a clear collaborative measure which has been made in
relation to the key industry players.
The government has also been seen obtaining feedback on the draft law proposed to improve and
enhance the economy and industry. Under MIT, tax deductions can be claimed for certain specific
costs and not for those costs which the trust has specifically done for tax exemption. All trusts have
been provided information on the reporting compliance and standards which makes them
comfortable in providing the inputs. For the losses incurred in the trust, the managed investment
trust definitely has to show case clearly in the books of books of accounts. Also capital gains is
another specific section which needs to be dealt separately with. The reforms which have been
recently done are considered to be the greatest reforms in the Australian laws. The main aim of
these new laws is to increase the investors to invest in MIT keeping in mind the needs and demands
of the investors.
Leo Flynn is the blogger of 2020directinvest.com.au. Leo is the author of investor guide and
investment related articles. Click here to contact with him. To learn more about investments and
investing go to his google+.
Content Resource : https://2020directinvest.wordpress.com/2015/04/20/managed-investment-
trust-and-its-latest-reforms-a-boon-or-a-bane/