Document ID: chunk:federal_register_of_legislation:C2007A00079:clause:10_1:p1
Version: federal_register_of_legislation:C2007A00079
Segment Type: clause
Provision Reference: sch 10 cl 1 (pt 1/2)
Character Range: 94673–97585

1  At the end of Division 12 in Schedule 1
Add:

Subdivision 12‑H—Distributions of managed investment trust income to foreign residents

Guide to Subdivision 12‑H

12‑375  What this Division is about

      A distribution to a foreign resident by managed investment trusts of their Australian sourced income and some capital gains may be subject to a single non‑final withholding at the corporate tax rate. This includes distributions made to the foreign resident indirectly through one or more intermediaries, if relevant notices have been provided by payers.
      Generally, the distribution must be made by the managed investment trust within 3 months after the end of its income year.
      Division 6 of Part III of the Income Tax Assessment Act 1936 does not apply to trustees and intermediaries to the extent that they have to withhold under this subdivision (see section 99G of that Division).

Table of sections

Operative provisions

12‑380 Object
12‑385 Withholding by trustee of managed investment trust
12‑390 Withholding by intermediary
12‑395 Meaning of managed investment trust
12‑400 Meaning of fund payment
12‑405 Meaning of intermediary
12‑410 Entity to whom payment is made
12‑415 Notices
12‑420 Agency rules

Operative provisions

12‑380  Object

 (1) The object of this Subdivision is to implement a withholding regime to assist the collection of Australian tax on distributions of Australian sourced income by *managed investment trusts to foreign residents (directly, or indirectly through one or more *intermediaries).

 (2) This regime overcomes information problems in applying alternative withholding regimes by:
 (a) providing for withholding at a flat rate—the *corporate tax rate; and
 (b) clarifying when withholding is required when payments are made via *intermediaries, which is commonly the case with distributions from *managed investment trusts.

Note: Withholding other than at a flat rate would require managed investment trusts and intermediaries to know information about the foreign resident that they are unlikely to know.

12‑385  Withholding by trustee of managed investment trust

 (1) The trustee of a *managed investment trust that makes a *fund payment in relation to an income year to an entity covered by section 12‑410 must withhold an amount from the payment.

 (2) The amount the trustee must withhold is:

12‑390  Withholding by intermediary

 (1) An entity must withhold an amount from a payment (the later payment) it makes if:
 (a) the entity is an *intermediary in relation to a payment (the earlier payment) it received; and
 (b) all or some of the later payment (the notice part) is attributable to the part of the earlier payment that was covered by the notice the entity received in relation to the earlier payment; and
 (c) the later payment is made to an entity covered by section 12‑410.

Note: Paragraph (1)(b) means that the notice part