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Federal Budget 2020-21: Managed investment trusts

Federal Budget 2020-21: Managed investment trusts

The Government continues to expand the list of countries with exchange of information agreements, providing access to lower withholding tax rates and driving inbound investment opportunities into Australian managed funds.

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The Government has added nine new exchange of information agreements and removed one, increasing the number of information exchange countries from 122 to 130. Australia has entered into agreements with these countries since the previous update to the list in 2019.

The new countries are Hong Kong, the Dominican Republic, Ecuador, El Salvador, Jamaica, Kuwait, Morocco, North Macedonia and Serbia. Kenya will be removed from the existing 122 countries on the list.  Pitcher Partners welcomes the addition of these countries, particularly Hong Kong, being one of Australia’s key investment partners.

From 1 July 2021, fund payments made by withholding Managed Investment Trusts (MITs) to investors in these jurisdictions should generally be eligible to access the reduced 15% MIT withholding tax rate, instead of the default rate of 30%. Fund payments typically include distributions of rental income and capital gains from taxable Australian property (with dividends, interest and royalty income subject to a separate withholding tax). Accordingly, these measures will further support investment into Australian real estate investment trusts (REITs).

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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