The Australian Taxation Office (ATO) has announced the release of the Law Companion Ruling 2020/2 – Non-concessional managed investment trust (MIT) income, which is effective from 1 July 2019 for those who rely on it in good faith.

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LCR Non-concessional MIT income released

We have released the Law Companion Ruling 2020/2 – Non-concessional managed investment trust (MIT) income.

The Ruling deals with the interpretation of the Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019 (the Act) and provides specific guidance on:

• how we will interpret various concepts associated with the Act, including which arrangements may be covered by the transitional treatment
• the concept of 'facility', which was not defined in the Act.

The Act is highly relevant to the use of stapled structures, particularly in the property and infrastructure sectors and provides:

• transitional rules which allow the concessional withholding rate of 15% to continue to be used for certain arrangements that existed prior to 27 March 2018.This means the concessional 15% rate will apply for
  • up to seven years for ordinary business staples
  • up to 15 years for large scale infrastructure staples
• a concession for new infrastructure projects approved by the Treasurer.

If you are affected, we encourage you to read the Ruling and seek advice (if needed) on how it applies to your situation.

Through our early engagement process, you can discuss with us complex business transactions you are considering or have implemented. We'll work with you and your tax advisor to:

• explore your tax arrangement
• provide advice to help you arrive at the right outcome
• request a draft application for a ruling (if relevant).

For further information contact us by:

• completing a call back request form
• emailing eerequest@ato.gov.au
• submitting an Early engagement (advice) request (PDF 1.34MB)