Private ruling: Foreign investment vehicle as trust
Date of advice: 8 November 2017
Published: April 2018
Ruling period: Years ended 30 June 2018 to 30 June 2022
Date scheme commenced: In the year ended 30 June 2018

Ruling: Q1: Will the Fund be considered a trust for Australian tax purposes? | A1: 

Relevant facts and circumstances: As provided by the applicant. The Fund is a foreign collective investment vehicle that will hold units in a proposed Australian managed investment trust.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 275-20 | Income Tax Assessment Act 1997 Section 960-100

Reasons for decision: Summary: 'Trust' is not defined in the ITAA1936 or ITAA 1997. French J in Harmer & Ors v. Federal Commissioner of Taxation (1989) 20 ATR 1461; 89 ATC 5180 stated that a trust 'is notably a definition of a relationship by reference to obligations'. He went on to state that the four essential elements of a trust are: 1. the trustee who holds a legal or equitable interest in the trust property 2. the trust property which must be property capable of being held on trust and which includes a chose in action 3. one or more beneficiaries other than the trustee; and 4. a personal obligation on the trustee to deal with the trust property for the benefit of the beneficiaries, which obligation is also annexed to the property. The Fund satisfies all 4 elements