On Wed 20.7.2016, the ATO issued the following Class Ruling:
- CR 2016/54: AMP Capital Infrastructure Equity Fund – creating a new stapled security.It applies from 1 July 2015 to 30 June 2016.
[LTN 138, 20/7/16]
[Link to income tax law – Income Tax Assessment Act 1997; Income Tax Assessment Act 1936]
Subdivision 126-G of the ITAA97
126-220 Object of this Subdivision
The object of this Subdivision is to ensure that CGT considerations are not an impediment to the restructure of trusts, whilst ensuring that subsequent changes to the manner and extent to which beneficiaries can benefit from the trusts are subject to appropriate tax consequences.
Extract from Class Ruling
Scheme
9. IEF A is an unregistered managed investment scheme for the purposes of the Corporations Act 2001. IEF A has the legal form of a unit trust.
10. AMP Investment Services Pty Limited (AMPIS) and AMP Capital Investors Limited (AMPCI) are Australian resident companies that act respectively as the trustee and investment manager of IEF A.
11. IEF A was established in 1995 to provide Australian wholesale investors with the ability to invest in non-controlling interests in Australian and New Zealand infrastructure assets, diversified by sector and asset life cycle.
12. As at 23 June 2016, IEF A is estimated to have had a market value of approximately $978.1 million.
13. IEF A has one class of units on issue.
The restructure
14. The restructure involved creating a stapled security consisting of units in IEF A being stapled to units in a new trust, the AMP Capital Diversified Infrastructure Trust B (IEF B). As a result, IEF A unit holders now hold stapled securities that consist of a unit in IEF A stapled to a unit in IEF B.
15. The investment mandate of the stapled IEF A and IEF B allows either trust to take active, controlling stakes in infrastructure assets (unlike the previous stand-alone investment mandate of IEF A). It is anticipated that any active, controlling stakes in infrastructure assets will be held by the trustee of IEF B rather than the trustee of IEF A.
Ruling
No capital gain or capital loss for IEF A unit holders
27. IEF A unit holders will not make a capital gain or capital loss as a result of the issue of units in IEF B, and the stapling of those units to their IEF A units, under the restructure.
Cost base of IEF A units immediately after the Transfer Time
28. As the requirements for the roll-over in Subdivision 126-G are satisfied, the first element of the cost base and reduced cost base of each IEF A unit holder’s units in IEF A just after the Transfer Time is 96% of the unit’s cost base and reduced cost base just before the Transfer Time (subsection 126-245(2) and subsection 126-245(4)).
Cost base of IEF B units immediately after the Transfer Time
29. As the requirements for the roll-over in Subdivision 126-G are satisfied, the first element of the cost base and reduced cost base of each IEF A unit holder’s new units in IEF B just after the Transfer Time is 4% of the cost base and reduced cost base of their corresponding IEF A units just before the Transfer Time (subsection 126-245(3) and subsection 126-245(4)).
Acquisition date of IEF B units for discount capital gain purposes
30. As the requirements for the roll-over in Subdivision 126-G are satisfied, for the purpose of determining eligibility to make a discount capital gain under Subdivision 115-A, an IEF A unit holder is taken to have acquired the IEF B units they received under the restructure on the date that they acquired their corresponding units in IEF A (item 9 of the table in subsection 115-30(1)).
Commissioner of Taxation
20 July 2016