The ATO on Wed 5.10.2016, released Product Ruling PR 2016/8 (Tax consequences of investing in Wellington Management Funds (Luxembourg)). It applies to Australian residents who are accepted to participate in the scheme on or after 1 July 2016 and on or before 30 June 2019.

[LTN 192, 5/10/16]

Extract from ruling


  1. Subject to paragraph 3 of this Product Ruling and the assumptions in paragraph 29 of this Ruling:

(a)         The relationship between the Management Company (or the Depositary) and the Unitholders constitutes a trust relationship for Australian income tax purposes.

(b)        Subject to the foreign income tax offset limit in section 770-75, the Unitholder will be entitled to a foreign income tax offset under Division 770 in an income year for foreign income tax paid by the Unitholder (or the Depositary) on an amount received by the Unitholder from the Umbrella Fund that is included, in part or whole, in the Unitholder’s assessable income for that income year.

(c)         The Unitholder will be entitled to a credit for Australian withholding tax under section 18-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA 1953) to the extent that the tax is withheld from:

  • an unfranked dividend derived by the Umbrella Fund and to which subsection 128B(1) of the Income Tax Assessment Act 1936 (ITAA 1936) applies, or
  • interest derived by the Umbrella Fund and to which subsection 128B(2) of the ITAA 1936 applies,

and that Australian withholding tax has been included in the Unitholder’s assessable income.

(d)        Provided the scheme ruled on is entered into and carried out as described in this Product Ruling, the anti-avoidance provisions in Part IVA of the ITAA 1936 will not apply to the Unitholder.