Reforms amplify Australia s investment appeal

Reforms amplify Australia’s investment appealProposed changes to the Managed Investment Trust (MIT) regime are an opportunity to cement Australia as a top tier destination for global real estate investment capital according to the Property Council of Australia.Executive Director (International and Capital Markets) Andrew Mihno, said the Government’s MIT initiative, is a hallmark reform the Property Council strongly supported.”The Property Council welcomes the Government’s draft Tax Laws Amendment (New Tax System for Managed Investment Trusts) Bill 2015 released today as a potentially game changing reform to affirm Australia as one of the world’s most attractive investment destinations,” Mr Mihno said.”The reforms provide certainty to industry and help attract patient long term capital that Australia needs to build prosperity. “The measures give industry an armoury of practical solutions to difficult issues.”The MIT reform process commenced under the previous Labor government and has been progressed by the Coalition. It is pleasing to work with both sides of politics to deliver beneficial reform.”And this reform is critically important because about 12 million Australians are investors in property trusts, either directly or indirectly through their retirement savings.”A healthy funds management industry needs a clear and globally competitive tax regime to attract international capital.”The industry currently operates under rules that were designed long before MITs ever existed and they create an unreasonable level of complexity and uncertainty for a key industry that drives the Australian economy.”Differences in the operation of tax law and trust law made it difficult to even determine the income to distribute to investors.”The Government’s innovative approach promises to simplify trust distributions and ensure MITs can rely on their trust deeds to distribute income and focus on what really matters – driving better returns for investors.”Government has championed a number of innovative ideas that should put to bed numerous serious issues surrounding distribution of income that jeopardised MIT businesses.”This reform promises to boost Australia’s standing as a leading funds management hub which has been the common goal supported by both major political parties and a fundamentally good idea.”Industry is reviewing the draft legislation and looks forward to working closely with the Government on the most effective ways to implement this reform package.”Of particular note, proposed changes to improve the current regime in the draft legislation include making it simpler for MITs to access:· trust loss rules that allow the MIT to carry forward losses in a weak economy;· capital gains rules that prevent unnecessary additional costs on acquisitions and enable the trusts to attract investors via scrip for scrip acquisitions; and· franking credits that remove unnecessary tax burdens for unit holders.Critically international life companies are now also able to invest under the MIT regime and represent about $2.6 trillion in global capital that Australia can now compete for to boost the economy and help fund large scale property and community infrastructure.Media contact: F­iona Benson | M 0407 294 620 | E [email protected]