The tax payable by funds on different types of investment income can be a vital consideration in the due diligence undertaken prior to either making investmentsor in restructuring the manner in which particular investments are held. The Stronger Super legislation now requires that trustees consider tax in both setting and giving effect to a fund’s investment strategy, and that trustees must have regard to the taxation consequences when giving instructions in mandates to investment managers.
This paper covers:??
- the broader Investment Governance framework, and particularly where tax fits inrelation to this
- ??key Australian tax considerations such as franking, CGT discount, foreign income tax offsets, revenue versus capital treatment, tax deferred distributions??
- potential issues that can arise from changes in how investments are held, eg changing from holding particular investments through a direct mandate to holding these through an Australian unit trust, and vice versa??
- specific issues for investments held by funds on behalf of pension versus accumulation members??
- specific issues for foreign investments, both Australian implications and foreign implications, including consideration of some of the more common structures for these investments (eg LPs, LLCs, SICARs) and some of the specific compliance issues (eg the potential requirement for filing in foreign jurisdictions)??
- the use of wholly owned Australian trust entities to hold particular investments.