Time for an AMIT action plan

Time for an AMIT action plan

Corporate Tax Partners, Peter Oliver and Scott Farrell, outline issues to consider when choosing whether to enter the new AMIT regime.

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The much anticipated Attribution Managed Investment Trust (AMIT) Bills were passed by the Senate yesterday and are expected to receive Royal Assent shortly. There are real benefits of electing to enter the AMIT regime, although the particular features of each trust need to be considered. 

Considerations include the potential application of the new arm’s length income test to all Managed Investment Trusts (MITs) and should involve the following: 

  • What are the advantages and disadvantages to each MIT electing to become an AMIT? Should an election be made in respect of the year commencing 1 July 2016?
  • Identify the key issues that need to be managed including:
    • amendments required to Trust Deeds and other constituent documents (including the MITs distribution policy)
    •  system issues – what changes are required to your IT environment, processes and interaction with custodian(s)?
    • do these amendments change the status of unit trusts?
      • will some unit trusts cease to be public trading trusts?
      • will some unit trusts potentially become a MIT on a retrospective basis?
    • what product opportunities and issues arise, including the on-going treatment of any multi-class unit trusts?
    • is it expected that any material capital gains may be realised in the short-term? If so, how will AMIT regime impact the distribution to be declared?
    • will trusts into which you invest adopt the AMIT regime and from when? 
  • Project timetable: draft timetable and business case and set workstreams and milestones. 
  • Impact on overall governance framework – consider ongoing impact on drafting of trust deeds, distribution policies, compliance plans, PDS, service level agreements and consider approaches to managing future commercial and tax risks. 
  • Communications and training strategy for key internal and external stakeholder groups. In particular, educating senior management and investment committee regarding the AMIT regime. 

KPMG can assist with identifying the issues to be addressed, planning the appropriate scope of work and with the execution of key elements of your AMIT action plan.

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