Managed Investment Trusts (MIT) taxation from 1 July 2008
Australian MITs (except those taxed as companies) will be able to make an irrevocable election to apply the CGT regime as a primary code for taxing certain disposals of assets. Consequently the tax treatment of asset disposals by MITs will be consistent with disposals of similar investments held by complying superannuation funds. This is subject to the appropriate integrity rules which include the requirement that investments meet eligible investment business rules in Division 6C of the Income Tax Assessment Act 1936.
MITs which can elect into the regime will be required to make an irrevocable election to apply the CGT regime to all disposals of eligible investments in the first financial year after 2008-2009. Under the current rules gains and losses made on the disposal of MIT investments may be on capital or revenue account, depending on the characterisation of the investment activities concerned.