Product Ruling PR 2016/8
Date of effect: 1 July 2016

What this ruling is about: 1. This Product Ruling sets out the Commissioner's opinion on the way in which the relevant provisions identified in the Ruling section apply to the defined class of entities who take part in the scheme to which this Ruling relates. All legislative references in this Ruling are to the Income Tax Assessment Act 1997 (ITAA 1997) unless otherwise indicated. 2. In this Product Ruling the scheme is an investment in Units of Wellington Management Funds (Luxembourg) (the Umbrella Fund) offered under a Prospectus issued by Wellington Luxembourg S.à r.l (the Management Company) on 28 June 2016. 3. This Product Ruling does not address: Class of entities 4. This part of the Product Ruling specifies which entities can rely on the Ruling section of this Product Ruling and which entities cannot rely on the Ruling section. In this Product Ruling, those entities that can rely on the Ruling section are referred to as the Unitholder. 5. The class of entities who can rely on the Ruling section of this Product Ruling consists of those entities that are Australian residents for taxation purposes and are accepted to participate in the scheme described in paragraphs 16 to 29 of this Product Ruling on or after 1 July 2016 and on or before 30 June 2019. 6. The class of entities who can rely on the Ruling section of this Product Ruling does not include entities that: Superannuation Industry (Supervision) Act 1993 7. This Product Ruling does not address the provisions of the Superannuation Industry (Supervision) Act 1993 (SISA). The Commissioner gives no assurance that the scheme is an appropriate investment for a superannuation fund. The trustees of superannuation funds are advised that no consideration has been given in this Product Ruling as to whether investment in this scheme may contravene the provisions of SISA. Qualifications 8. The class of entities defined in this Product Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 16 to 29 of this Ruling. 9. If the scheme actually carried out is materially different from the scheme that is described in this Product Ruling, then:

Class of entities or scheme: 4. This part of the Product Ruling specifies which entities can rely on the Ruling section of this Product Ruling and which entities cannot rely on the Ruling section. In this Product Ruling, those entities that can rely on the Ruling section are referred to as the Unitholder. 5. The class of entities who can rely on the Ruling section of this Product Ruling consists of those entities that are Australian residents for taxation purposes and are accepted to participate in the scheme described in paragraphs 16 to 29 of this Product Ruling on or after 1 July 2016 and on or before 30 June 2019. 6. The class of entities who can rely on the Ruling section of this Product Ruling does not include entities that: | Superannuation Industry (Supervision) Act 1993: 7. This Product Ruling does not address the provisions of the Superannuation Industry (Supervision) Act 1993 (SISA). The Commissioner gives no assurance that the scheme is an appropriate investment for a superannuation fund. The trustees of superannuation funds are advised that no consideration has been given in this Product Ruling as to whether investment in this scheme may contravene the provisions of SISA. | Qualifications: 8. The class of entities defined in this Product Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 16 to 29 of this Ruling. 9. If the scheme actually carried out is materially different from the scheme that is described in this Product Ruling, then: 10. This Product Ruling applies prospectively from 1 July 2016. It therefore applies only to the specified class of entities that enter into the scheme from 1 July 2016 until 30 June 2019, being its period of application. This Product Ruling will continue to apply to those entities even after its period of application has ended for the scheme entered into during the period of application. 11. However the Product Ruling only applies to the extent that there is no change in the scheme or in the entity's involvement in the scheme. | Changes in the law: 12. Although this Product Ruling deals with the income tax laws enacted at the time it was issued, later amendments may impact on this Product Ruling. Any such changes will take precedence over the application of this Product Ruling and, to that extent, this Product Ruling will have no effect. 13. Entities who are considering participating in the scheme are advised to confirm with their taxation adviser that changes in the law have not affected this Product Ruling since it was issued. | Note to promoters and advisers: 14. Product Rulings were introduced for the purpose of providing certainty about tax consequences for entities in schemes such as this. In keeping with that intention the Commissioner suggests that promoters and advisers ensure that participants are fully informed of any legislative changes after the Product Ruling has issued. 15. Subject to paragraph 3 of this Product Ruling and the assumptions in paragraph 29 of this Ruling: 16. The scheme that is the subject of this Ruling is identified and described in the following documents: Note: certain information has been provided on a commercial-in-confidence basis and will not be disclosed or released under Freedom of Information legislation. 17. For the purposes of describing the scheme to which this Product Ruling applies, there are no other agreements, whether formal or informal, and whether or not legally enforceable, which a Unitholder, or any associate of a Unitholder, will be a party to, which are a part of the scheme. Unless otherwise defined, capitalised terms in this Ruling take their meaning as per the Prospectus. 18. All Australian Securities and Investments Commission (ASIC) requirements are, or will be, complied with for the term of the agreements. | Overview of the Umbrella Fund: 19. The Umbrella Fund is an open-ended unincorporated mutual investment fund in the form of a 'fonds commun de placement'. It is governed by Luxembourg law and qualifies as an Undertakings for Collective Investment in Transferable Securities (UCITS) as regulated by Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities, as amended. 20. As a pooled investment vehicle and form of collective investment fund, the Umbrella Fund receives cash or assets from Unitholder subscriptions and invests its cash/assets in various assets comprising Transferable Securities, Money Market Instruments and some non-transferable securities. Investments are made within permitted parameters as set out in the Management Regulations and Prospectus, and in accordance with the requirements applicable to UCITS under Luxembourg laws and regulations. 21. Subscription for Units in the Umbrella Fund is made by completing required documentation (including an Account Opening Agreement) and submitting that, together with payment of the full purchase price of the Units subscribed for, for acceptance by the Management Company. The issue price of a particular Unit class in the Umbrella Fund or a Fund is based on the net asset value of that Unit class (subject to adjustments for swing pricing) at the Valuation Point on the relevant Dealing Day (that is the time of subscription). 22. The key features of the Umbrella Fund are that: 23. Distributions to the Unitholders of Distributing Unit Classes in a Fund may represent both dividends and capital gains received by the Umbrella Fund as a result of holding and/or disposing its assets, and on-paying these income streams to the Unitholders in the form of a fund distribution, net of taxes, fees and other expenses. 24. Depending on the domestic tax laws of the jurisdiction that the Umbrella Fund has invested in, withholding tax is likely to be incurred by the Umbrella Fund when income and/or capital proceeds are remitted from that jurisdiction to the Umbrella Fund. The amount of dividend income and/or capital proceeds that is then on-paid by the Umbrella Fund to the Unitholders, in the form of a fund distribution, will effectively be net of withholding tax. 25. Unitholders may request redemption of their Units from a Fund at the redemption price. The redemption price is based on the net asset value of the relevant Unit class in the Umbrella Fund or a Fund (subject to adjustments for swing pricing) at the Valuation Point on the relevant Dealing Day (that is the time of redemption). 26. Legal or beneficial ownership of Units cannot be transferred other than by redemption in accordance with the Management Regulations. | The Management Company: 27. Amongst other things, the Management Company: | The Depositary: 28. Amongst other things, the Depositary: | Assumptions: 29. This Product Ruling is made on the basis of the following necessary assumptions: Commissioner of Taxation 5 October 2016 | The Umbrella Fund constitutes a trust: 30. The term 'trust' is not defined in the ITAA 1936 or ITAA 1997. Whether a trust relationship between the Management Company (or the Depositary) and a Unitholder exists upon the Unitholder's acquisition of Units in the Umbrella Fund should therefore be determined in accordance with guidance provided by the Courts. 31. Gaudron, McHugh, Gummow, Kirby and Hayne JJ in Associated Alloys Pty Limited v. ACN 001 452 106 Pty Limited (in liquidation) (Formerly Metropolitan Engineering and Fabrication Pty Limited) and Anor [2000] HCA 25, at paragraph 29, endorsed the joint judgment of Dixon CJ, Williams and Fullagar JJ, in Kauter v. Hilton (1953) 90 CLR 86 who, at page 97, identified: 32. French J in Harmer & Ors v. Federal Commissioner of Taxation 89 ATC 5180; (1989) 20 ATR 1461 stated that a trust 'is notably a definition of a relationship by reference to obligations'. His Honour further stated at 89 ATC 5187 that there were four essential elements of a trust being: 33. All four essential elements of a trust are present so as to give rise to a trust relationship between the Management Company, the Depositary and the Unitholders. This is held because: | Division 770 - foreign income tax offsets: 34. Division 770 allows a non-refundable tax offset for an income year for foreign income tax paid where that amount of foreign income tax is paid in respect of an amount that is included in your assessable income for the year. 35. To the extent that the Unitholder has paid, or is deemed to have paid, foreign income tax such as withholding tax at source: | Section 18-30 - credit for withholding tax deducted: 36. Generally, an unfranked dividend, interest or royalty paid from Australia is subject to Australian withholding tax if it is derived by a non-resident (subsections 128B(1), (2) and (2B) of the ITAA 1936). 37. For the purposes of Division 11A of the ITAA 1936 (of which subsections 128B(1), (2) and (2B) form part), a beneficiary who is presently entitled to a dividend, interest or royalty included in the income of a trust estate is deemed to have derived that dividend, interest or royalty at the time of present entitlement, ensuring that this income retains the character of a dividend, interest or royalty when the trust income is distributed to the beneficiary (subsection 128A(3) of the ITAA 1936). 38. A resident beneficiary presently entitled to an unfranked dividend, interest or royalty paid to the trustee of a non-resident trust estate is therefore subject to Australian withholding tax (and not the non-resident trustee). 39. Section 18-30 of Schedule 1 to the TAA 1953 allows a resident beneficiary of a non-resident trust estate a credit for Australian withholding tax where: 40. The Unitholder will be entitled to a credit for Australian withholding tax pursuant to section 18-30 of Schedule 1 to the TAA 1953 to the extent that: | Part IVA - anti-avoidance: 41. Provided that the scheme ruled on is entered into and carried out as described in this Product Ruling, it is accepted that the scheme is an ordinary commercial transaction and Part IVA of the ITAA 1936 will not apply. 42. The following is a detailed contents list for this Ruling: © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft

Ruling: This Product Ruling has been given on the basis that the entity(s) that applied for the Product Ruling, and their associates, will abide by strict terms of use. Any failure to comply with the terms of use may lead to the withdrawal of this Product Ruling. 1. This Product Ruling sets out the Commissioner's opinion on the way in which the relevant provisions identified in the Ruling section apply to the defined class of entities who take part in the scheme to which this Ruling relates. All legislative references in this Ruling are to the Income Tax Assessment Act 1997 (ITAA 1997) unless otherwise indicated. 2. In this Product Ruling the scheme is an investment in Units of Wellington Management Funds (Luxembourg) (the Umbrella Fund) offered under a Prospectus issued by Wellington Luxembourg S.à r.l (the Management Company) on 28 June 2016. 3. This Product Ruling does not address: | Class of entities: 4. This part of the Product Ruling specifies which entities can rely on the Ruling section of this Product Ruling and which entities cannot rely on the Ruling section. In this Product Ruling, those entities that can rely on the Ruling section are referred to as the Unitholder. 5. The class of entities who can rely on the Ruling section of this Product Ruling consists of those entities that are Australian residents for taxation purposes and are accepted to participate in the scheme described in paragraphs 16 to 29 of this Product Ruling on or after 1 July 2016 and on or before 30 June 2019. 6. The class of entities who can rely on the Ruling section of this Product Ruling does not include entities that: | Superannuation Industry (Supervision) Act 1993: 7. This Product Ruling does not address the provisions of the Superannuation Industry (Supervision) Act 1993 (SISA). The Commissioner gives no assurance that the scheme is an appropriate investment for a superannuation fund. The trustees of superannuation funds are advised that no consideration has been given in this Product Ruling as to whether investment in this scheme may contravene the provisions of SISA. | Qualifications: 8. The class of entities defined in this Product Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 16 to 29 of this Ruling. 9. If the scheme actually carried out is materially different from the scheme that is described in this Product Ruling, then:


Appendix: The Umbrella Fund constitutes a trust: 30. The term 'trust' is not defined in the ITAA 1936 or ITAA 1997. Whether a trust relationship between the Management Company (or the Depositary) and a Unitholder exists upon the Unitholder's acquisition of Units in the Umbrella Fund should therefore be determined in accordance with guidance provided by the Courts. 31. Gaudron, McHugh, Gummow, Kirby and Hayne JJ in Associated Alloys Pty Limited v. ACN 001 452 106 Pty Limited (in liquidation) (Formerly Metropolitan Engineering and Fabrication Pty Limited) and Anor [2000] HCA 25, at paragraph 29, endorsed the joint judgment of Dixon CJ, Williams and Fullagar JJ, in Kauter v. Hilton (1953) 90 CLR 86 who, at page 97, identified: 32. French J in Harmer & Ors v. Federal Commissioner of Taxation 89 ATC 5180; (1989) 20 ATR 1461 stated that a trust 'is notably a definition of a relationship by reference to obligations'. His Honour further stated at 89 ATC 5187 that there were four essential elements of a trust being: 33. All four essential elements of a trust are present so as to give rise to a trust relationship between the Management Company, the Depositary and the Unitholders. This is held because: | Division 770 - foreign income tax offsets: 34. Division 770 allows a non-refundable tax offset for an income year for foreign income tax paid where that amount of foreign income tax is paid in respect of an amount that is included in your assessable income for the year. 35. To the extent that the Unitholder has paid, or is deemed to have paid, foreign income tax such as withholding tax at source: | Section 18-30 - credit for withholding tax deducted: 36. Generally, an unfranked dividend, interest or royalty paid from Australia is subject to Australian withholding tax if it is derived by a non-resident (subsections 128B(1), (2) and (2B) of the ITAA 1936). 37. For the purposes of Division 11A of the ITAA 1936 (of which subsections 128B(1), (2) and (2B) form part), a beneficiary who is presently entitled to a dividend, interest or royalty included in the income of a trust estate is deemed to have derived that dividend, interest or royalty at the time of present entitlement, ensuring that this income retains the character of a dividend, interest or royalty when the trust income is distributed to the beneficiary (subsection 128A(3) of the ITAA 1936). 38. A resident beneficiary presently entitled to an unfranked dividend, interest or royalty paid to the trustee of a non-resident trust estate is therefore subject to Australian withholding tax (and not the non-resident trustee). 39. Section 18-30 of Schedule 1 to the TAA 1953 allows a resident beneficiary of a non-resident trust estate a credit for Australian withholding tax where: 40. The Unitholder will be entitled to a credit for Australian withholding tax pursuant to section 18-30 of Schedule 1 to the TAA 1953 to the extent that: | Part IVA - anti-avoidance: 41. Provided that the scheme ruled on is entered into and carried out as described in this Product Ruling, it is accepted that the scheme is an ordinary commercial transaction and Part IVA of the ITAA 1936 will not apply.


What this Ruling is about | NOT LEGALLY BINDING SECTION: | A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. | If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. | Potential participants must form their own view about the commercial and financial viability of the product. The Commissioner recommends a financial (or other) adviser be consulted for such information. | This Product Ruling provides certainty for potential participants by confirming that the tax benefits set out in the Ruling part of this document are available, provided that the scheme is carried out in accordance with the information we have been given, and have described below in the Scheme part of this document. If the scheme is not carried out as described, participants lose the protection of this Product Ruling. | ...the established rule that in order to constitute a trust the intention to do so must be clear and that it must also be clear what property is subject to the trust and reasonably certain who are the beneficiaries. | Appendix 2 - Detailed contents list


Legislative references: ITAA 1936 ITAA 1936 Div 11A ITAA 1936 128A(3) ITAA 1936 128B(1) ITAA 1936 128B(2) ITAA 1936 128B(2B) ITAA 1936 Pt IVA ITAA 1997 ITAA 1997 Subdiv 207-B ITAA 1997 Div 230 ITAA 1997 Div 770 ITAA 1997 770-15 ITAA 1997 770-75 ITAA 1997 770-130 ITAA 1997 770-140 TAA 1953 Sch 1 Subdiv 18-B TAA 1953 Sch 1 18-30 SISA 1993 TAA 1953
Case references: Associated Alloys Pty Ltd v. ACN 001 452 106 Pty Ltd (in liq) [2000] HCA 25 (2000) 202 CLR 588 (2000) 46 ATR 91 (2000) 171 ALR 568 (2000) 74 ALJR 862 (2000) 18 ACLC 509