AMIT trustee taxation and penalties
Under the new tax system, the trustee of an AMIT may be liable to pay tax or administrative penalties, or both, in certain circumstances.
Trustee taxation
The trustee of an AMIT will be liable to pay tax when:
- the amount of the determined member component of a particular character that relates to assessable income falls short of the member component of that character
- the amount of the determined member component of a particular character that relates to a tax offset exceeds the member component of that character
- the sum of the determined member components of a particular character that relate to assessable income, exempt income or non-assessable non-exempt income attributed to members is less than the determined trust component of that character
- the trustee has a trust component deficit of a character relating to a tax offset (other than a foreign income tax offset)
- unders of a particular character that relate to assessable income are not properly carried forward
- overs of a particular character that relate to a tax offset are not properly carried forward
- the Commissioner determines that the trustee of a managed investment trust derived non-arm’s length income.
See also:
Administrative penalties
The trustee of an AMIT will be liable to pay an administrative penalty where:
- the trust has an under or an over for the base year which resulted from the intentional or reckless disregard of the law by the trustee
- the trustee fails to give AMIT Member Annual Statements (AMMA statements) to AMIT members by the required time
- the trustee enters into a scheme to derive non-arm’s length income
- the trustee fails to make certain information available to AMIT members for an income year.
Requirements
Record-keeping requirements
If you are carrying on a business, you must keep records relevant for any tax purpose that record and explain all transactions and other acts you are engaged in. Subsection 262A(2) of the Income Tax Assessment Act 1936 (ITAA 1936) prescribes the records to be kept, including:
- any documents relevant for the purpose of ascertaining the person’s income or expenditure
- documents containing particulars of any election, estimate, determination or calculation made by the person for tax purposes and, in the case of an estimate, determination or calculation, particulars showing the basis on which and the method by which the estimate, determination or calculation was made.
You must keep these records for your financial arrangements covered by the TOFA rules, even if you are not carrying on a business in relation to those arrangements.
Keep all relevant records for the later of:
- five years after they were prepared or obtained, or
- five years after the completion of the transactions or acts to which they relate.
This period may be extended in certain circumstances.
Keep records in writing and in English. You can keep them electronically as long as the records are in a form that we can access and understand to ascertain your tax liability. See TR 2005/9 Income tax: record keeping – electronic records.
Record retention
Keep the following records:
- a copy of the trust deed
- a copy of all trustee resolutions
- detailed statement of assets and liabilities
- the names in which business contracts are made
- a record of the name and contact details of the trustee at year end.
For more information on record keeping where losses are incurred, see TD 2007/2 Income tax: should a taxpayer who has incurred a tax loss or made a net capital loss for an income year retain records relevant to the ascertainment of that loss only for the record retention period prescribed under income tax law?
For more information on record keeping for CGT, see the Guide to capital gains tax 2018 and TD 2007/2.
Record keeping for overseas transactions
Keep records of any overseas transactions in which the AMIT is involved, or has an interest, during the income year.
The involvement can be direct or indirect, for example, through individuals, trusts, companies or other entities. The interest can be vested or contingent and includes a case where the AMIT has direct or indirect control of:
- any income from sources outside Australia not disclosed elsewhere on the tax return, or
- any property, including money, situated outside Australia. Where this is the case keep a record of the
- location and nature of the property
- name and address of any partnership, trust, business, company, or other entity in which the AMIT has an interest
- nature of the interest.
If an overseas interest was created by exercising any power of appointment, or if the AMIT had an ability to control or achieve control of overseas income or property, keep a record of the:
- location and nature of the property
- name and address of any partnership, trust, business, company, or other entity in which the trust has an interest.
If there is no trustee who is an Australian resident, the onus is on the public officer to keep this information.
Lodging an AMIT tax return
You must lodge AMIT tax returns electronically.
For AMITs with an income year ending on 30 June, the AMIT tax return must be lodged on or before 31 October. The Commissioner may allow later lodgment dates in certain circumstances. See Due dates for lodging and paying.
If an AMIT has derived income, irrespective of the amount of income derived, an AMIT will have to lodge a return unless exempted by the Commissioner.
Trustees of trusts that are trading trusts within the meaning of Division 6C of the ITAA 1936 (or that otherwise carry on or control a trading business within the meaning of Division 6C) do not qualify to be an AMIT and do not complete this tax return. Trustees of such trusts must lodge a trust tax return or, if they satisfy the conditions in section 102P of the ITAA 1936 (public trading trusts) and are a public trading trust for the purposes of Division 6C, a company tax return.
For income years starting on or after 1 July 2016, modifications have been made to the 20% tracing rule in Division 6C of the Income Tax Assessment Act 1936.
As such, a trust will not be a public trading trust (that is, taxed like a company if it is carrying on a trading business) solely because certain tax exempt entities and complying superannuation entities hold more than 20% of interests in the trust.
The repeal of Division 6B (including section 102J) applies for income years starting on or after 1 July 2016.
As a result, affected trusts cease to be a corporate unit trust for income years starting on or after 1 July 2016.
Trustees affected by these amendments need to:
- consider how the trust is affected by the amendments, and
- determine the impact on their registration requirements and tax obligations.
Lodging schedules with the AMIT return
The following schedules can be lodged with the AMIT tax return:
- Attribution managed investment trust (AMIT) tax schedule (lodgment of at least one AMIT tax schedule is mandatory for every AMIT each year)
- Capital gains tax schedule
- International dealings schedule
- Rental property schedule
- Non-individual PAYG payment summary schedule.
Do not lodge other schedules with the AMIT's tax return unless instructed. Keep any other schedules or documents with the AMIT’s tax records.
Ceasing to be an AMIT
A trust that was an AMIT for an income year but is not eligible to be an AMIT in a later income year:
- does not lodge an AMIT tax return for that later income year
- lodges a trust tax return or, if Division 6C applies, a company tax return, and
- may be required to lodge an AMIT tax schedule with the trust return.
See also:
Annual investment income reporting
Managed investment trusts, including AMITs, are required under subsection 393–10 of the Taxation Administration Act 1953 (TAA) to lodge an Annual investment income report if they made distributions to unit holders during the year. The report requires details of distributions, including amounts attributed and the names of the payees. For more information, phone 132866.