No Picture
Attorney At Law

How Is a Managed Investment Scheme Taxed?

A managed investment scheme or managed fund is a type of collective investment vehicle such as public unit trust. In such a trust, investors hand over money or other assets to a professional manager who manages the total funds to produce a return that is shared by investors. As members of the scheme, investors hold units in the trust that represent a proportional benefit as an entitlement to the trust assets. Managed investment schemes cover a variety of investments, including cash management trusts, property trusts and timeshare schemes. However, they do not encompass regulated superannuation funds, ADFs or term deposits. The commission considers that the property syndicate that is structured to comply with the managed investment scheme provisions of the Corporations Act 2001 (Cth) is taxable under the trust provisions of the income tax assessment legislation according to Taxation Determination TD 2005/28.
Managed investment schemes that are required to restructure to comply with the Managed Investments Act 1998 (Cth) giving income tax and capital gains tax relief from the consequences of the restructure. There are also special provisions in relation to corporate unit trusts. These entities, in relation to an income year qualify in this category as a public unit trust as part of an arrangement for the reorganisation of the company or company group. It may be that a business or other property of the company has been transferred to the entity and shareholders of the company involved in the reorganisation then received entitlements to take up units in the trust. A trust of this nature is a public unit trust under this purpose where any type of the units are listed or quotation on the stock exchange, the units are held by 50 or more persons, or any of the units are offered to the public. In this case, the managed investment scheme or corporate unit trust is taxed as a company. Obviously, this area of the law is extremely complicated and if you have any questions in relation to this part of the law you should seek advice from an appropriately qualified professional.…

No Picture
Free Legal Advice

How Is a Realisation of Real Property Taxed?

The proceeds from the mere realisation of the capital assets or from the change of investment not give rise to income according to ordinary concepts or talk profit arising from a profit-making undertaking or plan within the meaning of the legislation, even if the realisation that changes carried out in the most advantageous manner. Of course, the capital gains tax provisions may apply in relation to property acquired on or after the 1985.
In the Scottish Australian mining case, a coal mining company exhausted the main coal seam on land that it owned. It then subdivided the land, constructive roads and railway station, granted land to public institutions and then sold the subdivided parcels for profit. It was held that the taxpayer was merely realising capital asset to its best advantage. In the NF Williams case, the High Court commented that an owner of land who holds it until the price of land has risen and then subdivides and sells it is not exchanging in an adventure in the nature of trade or carrying out a profit-making scheme, even if a landowner seeks the advice of experts as to the best method of subdivision and sale or carries out work such as grating, levelling, roadbuilding in the provision of water and power.
More recent examples of the principle that the proceeds from the mere realisation of the S of the assessable as ordinary income are where the profits realised on the sale of subdivided farming land all receipts under agreements for the sale of timber growing on the taxpayers land or the progressive sale of farming property or the profits from the sale of the subdivided orchard are all the exempt from the calculation as assessable income. This reason, the realisation of real property is often not considered an element of assessable income.…