The Government on Wed 31.7.2013, released for comment updated draft legislation for the third and final element of the Investment Manager Regime [in Div 842 of the ITAA97]. The Government said the exposure draft builds on industry consultation including submissions received on an earlier exposure draft released in April 2013.
While the necessary integrity aspects of the draft legislation have been retained, Treasury noted that several changes have been made to the legislation including enabling tracing through certain entities and the introduction of provisions to deal with temporary inadvertent breaches of the widely held and closely held tests. It said these changes will also apply to the previously enacted element 2 of the Investment Manager Regime.
The Investment Manager Regime provides certainty for the tax treatment of passive investments of certain foreign widely held funds, both in relation to offshore investments undertaken through the use of an Australian-based intermediary (conduit income), and into Australian assets. Mr Bowen said under this legislation, gains of foreign funds from the disposal of portfolio interests in Australian assets will be largely exempt from Australian tax. He added that the Government “will monitor the operation of the Regime and continue to consult with stakeholders on possible improvements to the regime”.
COMMENTS are due by 13 September 2013.
Source: Treasurer’s media release No 014, 31 July 2013
[LTN 146, 31/7/13]