A new way of defining Trust Income for fixed trusts – AMIT
The Federal Government is kindly giving Trustees of fixed trusts a new way of calculating trust income, distribution and attributions. This is under the AMIT (Attribution Managed Investment Trust) rules.
It starts 1 July 2016, but you have to opt into the system first.
Most fixed trusts, that elect to join up to the new regime, get greater income entitlements and increased flexibility – than under the more rigid Division 6. You can even create multiple class trusts without triggering a resettlement. New products will be created that have never been seen in Australia. It is an exciting time.
To opt into the AMIT regime fund members or beneficiaries must currently have a ‘clearly defined’ set of rights to income and capital. The trust must also allocate trust attributes on a ‘fair and reasonable’ basis.
Should your trust enter into this new world? Yes, if it helps your beneficiaries. No if it doesn’t. If you don’t join then you merely continue to be subject to Division 6. The ATO is threating to give you a harder time if you don’t opt into the system in the first few years.
Legal Consolidated Barristers and Solicitors can work with you to amend your trust deed and prepare the necessary motions and resolutions for unitholders and trustees. We work with your Responsible Entity, accountants and lawyers to ensure that you don’t suffer a resettlement.
We do full due diligence section 601GC Corporations Act sign off.
For more information please telephone us.
See: Tax Laws Amendment (New Tax System for Managed Investment Trusts) Bill 2015, Income Tax Rates Amendment (Managed Investment Trusts) Bill 2015, Medicare Levy Amendment (Attribution Managed Investment Trusts) Bill 2015 and Income Tax (Attribution Managed Investment Trusts – Offsets) Bill 2015.