Income Tax (Attribution Managed Investment Trusts - Offsets) Bill 2015

Thursday, 03 December 2015

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (11:30): I move:

That this bill be now read a second time.

The Income Tax Rates Amendment (Attribution Managed Investment Trusts-Offsets) Bill 2015 forms part of a package of bills to introduce a new system for taxing managed investment trusts (MITs).

This bill imposes income tax on trustees of attribution MITs where they attribute excess tax offsets to members in some circumstances. This can happen if the trustee overestimates the amount of offsets it has available to attribute to members in an income year. This means that members are able to reduce their tax liability more than they otherwise would had they not been attributed excess offsets.

Tax will be payable by trustees of attribution MITs on the amount of the excess tax offsets at a rate of 100 per cent. This has the effect of clawing back excess tax offsets and neutralising the impact on tax revenue. This is consistent with outcomes that arise when a company passes out excess franking credits.

Further details of the bill and the new tax system applying to managed investment trusts are set out in the explanatory memorandum for the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Bill 2015.