The Australian real estate market attracts significant foreign capital from global institutions. Polar 993 as an AFSL Trustee is able to establish MIT Trusts which provide the best tax structure for foreign investors to hold real estate and passive assets in Australia.
What is a MIT?
A managed investment trust (MIT) is an investment trust that invests primarily in passive income activities. Under the MIT withholding tax regime, foreign investors are eligible for a reduced rate of withholding tax on fund payments from MITs if they are a resident of a country with which Australia has an effective exchange of information treaty.
Tax Concessions
Withholding tax concessions are available to foreign investors participating in a unit trust structure that qualifies as a MIT. Foreign investors are able to benefit from a concessional withholding tax rate of 15 per cent (rather than the standard 30 per cent rate that would otherwise apply) for eligible distributions made from the MIT.
Requirements to Qualify as a MIT
- An AFS Licenced trustee is required to act as the trustee.
- Central management and control of the MIT is in Australia and a substantial portion of the investment management activities are carried out in Australia.
- The trust does not carry on or control an active trading business.
- The trust is a managed investment scheme.
- The MIT is widely held & meets the closely held restriction.
Investment Management Services
- The Australian Taxation Office requires that a substantial portion of the investment management activities are carried out in Australia.
- The Polar 993 team has the skills and experience to provide the investment management services in Australia as required to be a complying MIT.
- Activities which are regarded as investment management activities beyond operating and managing activities include regular performance of market analysis (research and economic), identification of potential investments, making of recommendations, the final investment decision, the preparation and provision of regular reports on the performance of the investment, evaluation and negotiation of contracts, recommended changes to the policies, regularly reporting to unitholders and attendance at investment committee meetings.
As an integrated team we provide the solutions to assist foreign clients.
If you have any questions regarding MITs and fund structures please do not hesitate to contact us. We are always pleased to help and to assist clients to find the optimal fund structure.
