On Tuesday 7 August 2018, Treasury released draft legislation setting out the conditions stapled entities must comply with to access the infrastructure concession and/or transitional arrangements for its proposed changes to the tax treatment of stapled structures.

These are the integrity measures that were not ready to be released in first exposure draft of the Stapled Structure measures on 27 July 2018. Treasury had put out a proposal paper on these integrity measures, on 28 June 2018 and, by the time consultation closed (on 12 July 2018) the integrity measures were not drafted.

The proposed integrity conditions include:

  • the extension of existing integrity rules that apply to Managed Investment Trusts (MITs) to ensure that all staples eligible for the transition rules or the infrastructure concession are required to comply with the existing non-arm’s length income rule; and
  • the introduction of statutory caps on the amount of cross-staple rent that is able to access the concessional 15% rate of withholding tax (available under the MIT regime) for economic infrastructure projects during the transition or concession period.

SUBMISSIONS are due by 14 August 2018.

FJM 8.8.18

[Treasury website: Consultation Page; Draft Bill, Draft EM; Treasurer’s website: Media Release; TT article: Re: Policy Paper; LTN 151, 8/1/8/18; KPMG Daily Tax News 8/8/18; Tax Month – August 2018]


About the author