House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Small Business and Assistant Treasurer, the Hon Kelly O'Dwyer MP)

Chapter 3 - The attribution model for managed investment trusts

Outline of chapter

3.1 This Chapter explains the operation of the attribution model of taxation for attribution MITs. Under the attribution model, an attribution MIT must:

•

determine the overall amounts of particular characters for the trust for an income year; and

•

attribute amounts with particular characters for that income year to members on a fair and reasonable basis in accordance with the constituent documents of the trust.

Context of amendments

3.2 Trusts, including managed investment trusts, are currently taxed under the general trust provisions in Division 6 of Part III of the Income Tax Assessment Act 1936 (ITAA 1936). The principles underlying the general trust provisions are, broadly, that:

•

a beneficiary's taxable income for a year includes a proportionate share of the net income of the trust where the beneficiary is presently entitled to a share of the income of the trust; and

•

the trustee of the trust is taxed on any net income of the trust which has not been included in the assessable income of a presently entitled beneficiary.

3.3 The Board of Taxation identified a range of practical difficulties in applying the rules in Division 6 to managed investment trusts.

3.4 The attribution model for attribution MITs will provide greater certainty for trustees and beneficiaries by aligning the commercial and tax consequences of the activities of a managed investment trust and providing flow-through of amounts with specific tax characters.

3.5 The attribution model has been developed in consultation with key stakeholders and is consistent with the current commercial practices of managed investments trusts.

Summary of new law

3.6 This Chapter explains the attribution model of taxation for attribution MITs. Under the attribution model, an attribution MIT must:

•

determine the overall amounts of particular characters for the trust; and

•

attribute amounts with particular characters to entities that are members of the trust in respect of that income year in accordance with specified attribution principles.

Trust components of particular characters

3.7 Under the attribution model of taxation, a trustee of an attribution MIT must first calculate the total of the amounts associated with the various activities of the trust that attract different tax consequences - that is, the trust component of each particular character.

3.8 The trustee must then determine the amount of the trust components of particular characters and create a document recording those amounts - that is, the determined trust components.

Attributing amounts to members

3.9 Once the various trust components of particular characters for an income year are calculated, the trustee of an attribution MIT must attribute a share of the determined trust components to each entity that is a member of the attribution MIT in respect of the income year on a fair and reasonable basis in accordance with the constituent documents of the trust.

3.10 The amount of a trust component of a particular character attributed to a member (the member component of a particular character) is based on the member's clearly defined interests in the attribution MIT.

3.11 The trustee must then determine the amount of the member component of particular characters that is attributed to each member (the determined member component) and issue an AMIT member annual statement (AMMA statement) to the member that records those amounts.

3.12 The amount that is recognised by a member for their income tax purposes in relation to their investment in an attribution MIT is the determined member component, which is generally the amount shown on the AMMA statement issued by the attribution MIT.

Comparison of key features of new law and current law

Detailed explanation of new law

3.13 This Chapter explains the attribution model of taxation for attribution MITs. Under the attribution model, an attribution MIT must:

•

determine the overall amounts (the determined trust components) of particular characters for the trust; and

•

attribute the determined trust components of particular characters to entities that are members of the trust in respect of that income year in accordance with attribution principles.

Determine trust components of particular characters

3.14 To work out the amount that is to be attributed to each member for an income year, an attribution MIT must:

•

work out the amount (the trust component) of each character for the income year; and

•

determine the amount of the trust component (the determined trust component) of each character that it uses as the basis for attributing amounts to members.

[Schedule 1, item 1, section 276-250]

3.15 Amounts (including tax offsets) derived or received by, or otherwise accruing to, an attribution MIT have particular characters. An amount of a particular character will be attributed to members of the attribution MIT on a fair and reasonable basis and retain its character in the hands of the members.

3.16 As a result, for income tax purposes, members of the attribution MIT will broadly recognise the amounts attributed to them in the same way that the amounts were recognised by the attribution MIT.

What is an amount of a particular character?

3.17 An amount has a particular character for income tax purposes if the income tax law treats the amount in a way that is distinct to the way that it treats another kind of amount.

3.18 The character of a particular amount will depend on the activities of the attribution MIT that gave rise to the amount and the source of the amount.

3.19 Amounts of a particular character fall broadly into four main categories:

•

assessable income;

•

exempt income;

•

non-assessable non-exempt income; and

•

tax offsets.

3.20 Examples of amounts of assessable income that are of a particular character which typically need to be identified by an attribution MIT include:

•

discount capital gains;

•

non-discount capital gains;

•

dividends, interest or royalties that are subject to withholding tax; and

•

foreign source income.

What is the trust component of a particular character?

3.21 To work out how much of an amount of a particular character is attributed to each member for an income year, an attribution MIT must first work out the trust component for the income year under section 276-260 of the Income Tax Assessment Act 1997 (ITAA 1997).

3.22 The object of section 276-260 is to ensure that the attribution MIT's assessable income, exempt income, non-assessable non-exempt income and tax offsets for the income year are allocated, according to their character, into separate components. [Schedule 1, item 1, subsection 276-260(1)]

3.23 An attribution MIT must work out the trust component for an income year:

•

of a character relating to assessable income;

•

of a character relating to exempt income;

•

of a character relating to non-assessable non-exempt income; and

•

of a character relating to a tax offset.

[Schedule 1, item 1, section 276-260(2)]

3.24 The trust component of a particular character for an income year is the total amount of that character worked out by the attribution MIT for the income year in accordance with the rules specified in sections 276-265 and 276-270. [Schedule 1, item 1, subsections 276-260(2) and (4); Schedule 9, item 12, definition of 'trust component' in subsection 995-1(1)]

3.25 However, the amount of the trust component worked out for an income year may be adjusted to deal with the effect of unders and overs (see Chapter 4). [Schedule 1, item 1, subsection 276-260(3)]

3.26 Section 276-265 specifies two general rules that must be applied by an attribution MIT to work out the trust component of a particular character for an income year.

3.27 First, the trust component of each particular character must be calculated as if the trustee:

•

was liable to pay tax; and

•

was an Australian resident taxpayer.

[Schedule 1, item 1, subsection 276-265(1)]

3.28 The purpose of this rule is to ensure that the trustee of an attribution MIT works out the trust components of each particular character as if the trustee were an Australian resident taxpayer in respect of the attribution MIT's assessable income (net of deductions), tax offsets, exempt income and non-assessable non-exempt income. Therefore, for example, the amount of the trust component of a character relating to a tax offset for the income year is the amount of the attribution MIT's tax offset of that character for the income year, making these assumptions.

3.29 Second, the sum of all of the trust components of a character relating to assessable income of the attribution MIT for the income year must equal:

•

the total assessable income of the attribution MIT for the income year

less

•

all deductions of the attribution MIT for the income year.

[Schedule 1, item 1, subsection 276-265(2)]

3.30 For the purposes of working out the total assessable income of the attribution MIT for the income year, and deductions of the attribution MIT for the income year, the rules in subsection 276-265(1) apply. [Schedule 1, item 1, subsection 276-265(2)]

3.31 However, if an attribution MIT makes a tax loss (because its deductions exceed its assessable income), the amount of each trust component of a character relating to assessable income of the attribution MIT for the income year is nil. [Schedule 1, item 1, subsection 276-265(3)]

3.32 Section 276-270 specifies additional rules relating to the allocation of deductions that must be applied by an attribution MIT to work out the trust components of a character relating to assessable income of the attribution MIT for an income year. [Schedule 1, item 1, section 276-270]

3.33 Under these deduction allocation rules:

•

deductions that relate directly to an amount that is a character of assessable income must initially be applied only to reduce that character of assessable income;

•

deductions that relate to two or more amounts that are characters of assessable income must be apportioned between those amounts and applied to reduce those characters of assessable income on a reasonable basis; and

•

any remaining deductions (after applying the first two rules) must be apportioned between the remaining amounts that are characters of assessable income on a reasonable basis.

[Schedule 1, item 1, subsections 276-270(1) and (2)]

3.34 For these purposes, the attribution MIT must determine whether a deduction is directly related to a particular character of assessable income on a reasonable basis. [Schedule 1, item 1, subsection 276-270(3)]

3.35 Factors that are relevant in determining whether the allocation of a deduction is reasonable include:

•

whether the deduction was incurred in the course of deriving a particular amount of assessable income;

•

whether the deduction is factored into the financial risk management of the assets from which the particular amount of assessable income arises;

•

whether the deduction more directly relates to other amounts of assessable income; and

•

whether the trustee uses a consistent methodology for allocating deductions to amounts of assessable income.

Example 3.1

The ABC Trust is an attribution MIT that invests in Australian equities and derives dividends, interest and capital gains. The ABC Trust incurs a number of general expenses relating to the day to day operation of the trust (such as management fees and accounting expenses). These general expenses relate to the derivation by the Trust of assessable income of all characters.

The trustee of the ABC Trust has consistently maintained a policy of allocating non-capital expenses against assessable income that has a character other than capital gains. If excess non-capital expenses remain after they are applied against assessable income that has a character other than capital gains, the trustee allocates the excess against net capital gains.

The allocation of deductions on this basis is considered to be reasonable because this approach is consistent with established practice of the ABC Trust.

3.36 The ordinary rules affecting when losses or outgoings are deductible for trusts, such as those governing the recoupment of carry-forward of trust losses and the requirement to apply losses against net exempt income, apply for the purposes of calculating the trust components of an attribution MIT.

Example 3.2

The ABC Trust is an attribution MIT. In the 2017-18 income year, the ABC Trust:

•

derived interest income of $50,000 and other Australian income of $50,000 - as a result, the ABC trust's total assessable income year for the 2017-18 income year is $100,000; and

•

incurred deductible expenses of $90,000.

In addition, the ABC Trust had:

•

nil exempt income in the 2017-18 income year; and

•

tax losses from earlier income years of $30,000.

The ABC Trust allocates its deductions evenly against its interest income and other Australian income. This includes the ABC Trust's tax losses from earlier years (which are deductible in accordance with the rules in subsection 36-15(2)).

Applying the rules in sections 276-260 and 276-270, having identified the types of income derived, allocated deductions, and applied carried forward losses, the ABC Trust calculates its trust components of interest income and other Australian source income to be nil. The ABC Trust has unrecouped losses of $20,000 that are carried forward.

The ABC Trust also has an under (see Chapter 4) of $20,000 of interest income relating to the 2016-17 income year that it discovered in the 2017-18 year.

The ABC Trust's trust component of interest income is increased by the amount of the under (subsection 276-305(2)).Therefore, the ABC Trust's trust component of interest income for the 2017-18 income year is $20,000.

In this regard, the tax losses carried forward by the ABC Trust into the 2017-18 income year cannot be applied to reduce the amount of an under which relates to a previous income year.

3.37 If an attribution MIT makes a capital loss, the capital loss must be applied to reduce capital gains. The trustee can choose the order in which to apply capital losses against capital gains (consistent with the current treatment of capital losses). The attribution MIT will make a net capital gain if its capital gains for an income year exceed its capital losses.

3.38 However, if an attribution MIT has more than one class of members and has not made an election under section 276-20 to treat each class as a separate attribution MIT, capital losses related to assets that one class of members has an interest in should not offset capital gains that a different class of members has an interest in as this would be inconsistent with the principle that losses should be applied on reasonable basis.

What is the determined trust component of a particular character?

3.39 An attribution MIT must create a document that records, and expressly states, the amount of the trust component for each particular character for an income year. The document can be in electronic form or in writing. [Schedule 1, item 1, subsections 276-255(1) and (2)]

3.40 The attribution MIT must, at a time after the document is created, send AMMA statements for the income year to entities that were members of the attribution MIT in the income year. The amount of the trust component stated in the document must reflect the total of the determined member components reflected in those AMMA statements. [Schedule 1, item 1, paragraphs 276-255(2)(c) and (d)]

3.41 The amounts recorded in this document are used as the basis for attributing amounts to an entity that is a member of the attribution MIT in respect of the income year. The amount stated to be the trust component of a particular character for an income year in this document is the determined trust component of that particular character for the income year. [Schedule 1, item 1, sections 276-250 and 276-255; Schedule 9, item 4, definition of 'determined trust component' in subsection 995-1(1)]

3.42 An attribution MIT can revise the trust component for a particular character for an income year. In that event, the attribution MIT must create a revised document that records the amount of the trust component for each character for the income year. This revised document is then used to work out determined trust component of a particular character for the income year and forms the basis of attribution by the attribution MIT. [Schedule 1, item 1, subsection 276-255(3)]

Example 3.3

The ABC Trust is an attribution MIT that has an income year which ends on 30 June 2017. On 1 July 2017, the trustee creates a document stating the amount of the trust component for each character for the 2016-17 income year. The trustee sends AMMA statements to its members on 10 July 2017.

On 1 September 2017, the trustee creates another document stating a different amount as the trust component for each character for the 2016-17 income year. It sends revised AMMA statements reflecting the revised amount to its members on 10 September 2017.

The document created on 1 September 2017 is the only document that meets the requirements in section 276-255 in respect of the amount for the 2016-17 income year.

Attribute amounts of particular characters to members

3.43 An attribution MIT must attribute the determined trust component of each particular character for an income year to its members. This is to ensure that an amount of a particular character that is derived or received by an attribution MIT for income tax purposes flows through the attribution MIT to its members for income tax purposes and retains that character.

3.44 As a result, members will recognise the amount of a particular character in broadly the same way as it would have been recognised if the member had derived or received an amount of that character directly (see Chapter 7).

3.45 To attribute the determined trust component of each particular character for an income year to its members, an attribution MIT must:

•

work out the member component of each particular character for the income year; and

•

attribute the amount of the member component (the determined member component) of each particular character for the income year to each member.

[Schedule 1, item 1, section 276-200]

What is the member component of a particular character?

3.46 The member component of a particular character for an entity that was a member of the attribution MIT in respect of an income year is so much of the determined trust component of that character that is attributable to the membership interests held in the attribution MIT by the member in respect of that income year. [Schedule 1, item 1, section 276-210; Schedule 9, item 9, definition of 'member component' in subsection 995-1(1)]

3.47 The member component for each member of an attribution MIT must be worked out applying the attribution principles - that is:

•

the attribution must be worked out on a fair and reasonable basis in accordance with the constituent documents of the attribution MIT; and

•

no part of the determined trust component of a particular character can be attributed to a particular member because of the tax characteristics of the member - that is, the attribution must not involve streaming of amounts of a particular tax character to a particular member.

[Schedule 1, item 1, subsections 276-210(3) and (4)]

Example 3.4

The ABC Trust is an attribution MIT that has a single class of members. All of the members have the same rights to the income and capital of the trust.

Thirty per cent of the members of the ABC Trust are foreign residents.

The ABC Trust derives foreign source income. Under the attribution principles, the trustee of the ABC Trust must attribute the foreign source income to both its Australian resident and foreign resident members.

If the trustee of the ABC Trust attributes the foreign source income solely to foreign resident members, the attribution would be invalid as the attribution principles would be breached because the trustee streamed the income due to the tax characteristics of particular members.

Example 3.5

The XYZ Trust is an attribution MIT that receives a franked dividend of $70, with an attached $30 franking credit.

The XYZ Trust attributes the dividend of $70 to Member A in accordance with their clearly defined rights under the Trust's constituent documents.

The XYZ Trust purports to separately attribute the $30 franking credit and tax offset entitlement associated with the franking credit to Member B.

The attribution of the franking credit amount and tax offset entitlement on a different basis to the attribution of the dividend to which the franking credit is attached breaches the attribution principles because the trustee streamed amounts due to the tax characteristics of particular members.

3.48 Holders of debt-like trust instruments are not treated as members of an attribution MIT. Therefore, if the only interest that an entity holds in an attribution MIT is a debt-like trust instrument, the trustee of the attribution MIT cannot attribute a trust component to the entity. [Schedule 1, item 1, section 276-510]

3.49 An amount attributed to members will satisfy the attribution principles if the attribution is consistent with the clearly defined interests of the members. Therefore, for example, if the defined interests of members in a particular class specifically relate to the performance of particular underlying assets, the anti-streaming attribution principle would not be breached if tax attributes (such as source or franking status) are matched with the assets giving rise to those tax attributes.

3.50 Legislative safe harbour rules apply to provide certainty for common arrangements where the members of an attribution MIT are attributed certain amounts. These legislative safe harbours do not limit the scope of the general attribution principles in subsections 276-210(3) and (4).

3.51 The first safe harbour rule applies if, in accordance with its constituent documents, an attribution MIT streams the proceeds from the sale of assets to finance a large redemption.

3.52 That is, an amount that is attributed to a member of an attribution MIT is taken to have been worked out on a fair and reasonable basis, and does not involve streaming of character amounts, if the amount reflects the fact that the trustee has exercised a power in the constituent documents of the attribution MIT that allows the trustee to direct an amount from the sale of an asset to a particular member if:

•

the member redeems one or more membership interests in the attribution MIT; and

•

the amount is made to fund the redemption.

[Schedule 1, item 1, subsection 276-210(5)]

Example 3.6

The ABC Trust is an attribution MIT. Under the constituent documents of the ABC Trust, the trustee has the power to stream an amount arising from the sale of an asset to a particular member where:

•

a member redeems one or more membership interests; and

•

the streaming is made to fund the redemption.

Lee-Anne is a member of the ABC Trust. Lee-Anne redeems a significant number of units that she holds in the ABC Trust. The trustee of the ABC Trust needs to sell assets to fund the redemption. As a result, the ABC Trust makes a capital gain. The trustee exercises the power in the constituent documents to stream the capital gain arising from the sale of the assets to Lee-Anne.

The attribution of the capital gain to Lee-Anne in these circumstances is consistent with the attribution principles. The attribution principle that prohibits streaming is not breached because the streaming of the capital gain does not arise due to the tax characteristics of Lee-Anne. Rather, the streaming arises because, to prevent on-going members from being disadvantaged, the ABC Trust must sell assets to fund the redemption of Lee-Anne's units.

3.53 The second safe harbour rule applies where an amount that is attributed to a member in a particular income year reflects unders and overs for prior income years (see Chapter 4).

3.54 That is, an amount that is attributed to a member of an attribution MIT is taken to have been worked out on a fair and reasonable basis, and does not involve streaming of character amounts, if the amount reflects the fact that:

•

either:

-

an amount of an under relating to a base year increases the trust component for an attribution MIT for a later income year under section 276-305; or

-

an amount of an over relating to a base year decreases the trust component for an attribution MIT for a later income year under section 276-305; and

•

an entity is a member of the attribution MIT at a time in relation to the later income year, but was not a member of the attribution MIT in respect of the base year.

[Schedule 1, item 1, subsection 276-210(6)]

Example 3.7

The ABC Trust is an attribution MIT that has a single class of members. All of the members have the same rights to the income and capital of the trust.

In the 2017-18 income year:

•

the ABC Trust disposes of assets and makes a net capital gain of $230,000; and

•

discovers an under (see Chapter 4) that is a capital gain in relation to the 2016-17 base year of $20,000.

Under the constituent documents of the ABC Trust, the amount of an under or over for a base year is recognised in the discovery year and is allocated to members who hold units at the time that the trustee attributes the income or other amounts of the trust for the discovery year (based on the number of units that they hold at that time).

As a result, in the 2017-18 income year, the ABC Trust attributes capital gains of $250,000 to its members based on the number of units that they hold at that particular time.

Chai became a member of the ABC Trust on 1 February 2018. The ABC trust attributes amounts to members who hold units on 30 June 2018. Therefore, a part of the capital gain of $250,000 is attributed to Chai, even though some of that capital gain is attributable to the under in relation to the 2016-17 base year.

The attribution of the capital gain to Chai in these circumstances is consistent with the attribution principles (even though Chai was not a member of the ABC Trust in the 2016-17 income year). In this regard:

•

the attribution was worked out on a fair and reasonable basis in accordance with the constituent documents of the ABC Trust; and

•

the attribution does not, to any extent, involve streaming of character amounts.

This ensures that the unders and overs system, which essentially allows for a variance to be reconciled in the income year in which the variance is discovered, can operate effectively.

3.55 The third safe harbour rule applies where an attribution MIT makes a capital gain or capital loss in an income year, where that capital gain or capital loss is reflected in an amount attributed to an entity that was not a member of the attribution MIT at the time it was made.

3.56 That is, an amount that is attributed to a member of an attribution MIT is taken to have been worked out on a fair and reasonable basis, and does not involve streaming of character amounts, if the amount reflects the fact that:

•

the attribution MIT made a capital gain or capital loss in an income year for the purpose of working out the trust component of the attribution MIT for an income year in accordance with the rules in section 276-265; and

•

an entity was a member of the attribution MIT in respect of the income year, but was not a member at the time the capital gain or capital loss was made.

[Schedule 1, item 1, subsection 276-210(7)]

Example 3.8

The ABC Trust is an attribution MIT that has a single class of members. All of the members have the same rights to the income and capital of the trust.

Under the constituent documents of the ABC Trust, members who hold units at the time that the trustee attributes the income of the trust are entitled to a share of that income (based on the number of units that they hold at that time).

The ABC Trust sold an asset on 1 February 2017 and made a capital gain at that time.

Amy became a member of the ABC Trust on 1 March 2017 - that is, part way through the ABC Trust's income year.

At the end of the ABC Trust's income year, the trustee attributes amounts to its members. As a result part of the capital gain that the ABC Trust made on 1 February 2017 is attributed to Amy.

The attribution of the capital gain to Amy in these circumstances is consistent with the attribution principles (even though Amy was not a member of the ABC Trust at the time the capital gain was made). In this regard:

•

the attribution was worked out on a fair and reasonable basis in accordance with the constituent documents of the ABC Trust; and

•

the attribution does not, to any extent, involve streaming of character amounts.

What is the determined member component of a particular character?

3.57 The determined member component of a particular character that is attributed to an entity that is a member of an attribution MIT in respect of an income year is the amount that is recognised and taken into account by the member for their income tax purposes.

3.58 The determined member component of a particular character for an income year is generally the amount of a particular member's member component of that character stated by the attribution MIT in the latest AMMA statement that is given to the member for the income year. [Schedule 1, item 1, subsection 276-205(1); Schedule 9, item 4, definition of 'determined member component' in subsection 995-1(1)]

3.59 In some circumstances, the member of an attribution MIT can nominate a different determined member component (see Chapter 7).

What is an AMMA statement?

3.60 The trustee of an attribution MIT must give an AMMA statement for an income year to each entity that was a member of the attribution MIT in respect of that income year. [Schedule 1, item 1, section 276-450 and subsection 276-455(1)]

3.61 The AMMA statement that is given to an entity that is a member of an attribution MIT in respect of an income year sets out the member's determined member components for that income year. The objective of the AMMA statement is to ensure that the information provided by the trustee of an attribution MIT to a member is sufficient for that member to complete their income tax return.

3.62 An entity will be a member of an attribution MIT in respect of an income year if, under the constituent documents of the trust, the entity has rights to trust income derived during income year and is attributed amounts for that income year.

Example 3.9

ACR Co becomes a member of an attribution MIT, the ABC Trust, on 15 July 2018. The constituent documents of the ABC Trust specify that an entity which becomes a member of the trust at any time before the trust makes a final distribution for an income year is entitled to a share of that final distribution.

The ABC Trust makes a final distribution (and issues AMMA statements) for the 2017-18 income year on 31 August 2018.

Therefore, ACR Co will be a member of the ABC Trust in respect of the 2017-18 income year. Consequently, ABC Trust is required to give an AMMA statement to ACR Co for that income year.

As a consequence, ACR Co will need to take into account amounts that flow through the ABC Trust (as shown on the AMMA statement) when preparing its income tax return for the 2017-18 income year.

3.63 The AMMA statement must:

•

include information that reflects the amount and character of each determined member component of the member; and

•

state the amount of the AMIT cost base net amount for the income year in respect of the CGT asset that is the member's unit or interest in the attribution MIT (see Chapter 7).

[Schedule 1, item 1, section 276-460]

3.64 The AMMA statement for an income year must be given to the member of the attribution MIT no later than three months after the end of the income year. [Schedule 1, item 1, subsection 276-455(2)]

3.65 However, the trustee of an attribution MIT is not required to give an AMMA statement to a member if:

•

all of the member's determined member components for the income year are nil; and

•

all of the member's membership interests in the attribution MIT have an AMIT cost base net amount for the income year of nil (see Chapter 7).

[Schedule 1, item 1, subsection 276-455(3)]

3.66 If the trustee of an attribution MIT fails to give AMMA statements to its members by required time, the trustee may be liable to an administrative penalty under Subdivision 286-C of Schedule 1 to the TAA 1953. [Schedule 1, items 2 and 3, subsection 286-75(2AB) and paragraph 286-80(2)(a) of Schedule 1 to the TAA 1953]

3.67 Subdivision 286-C of Schedule 1 to the TAA 1953 operates to impose an administrative penalty where documents are not lodged on time. The amount of the penalty depends on circumstances and is set out in section 276-80.

3.68 An attribution MIT can reconcile variances between amounts actually attributed to members for an income year and amounts that should have been attributed by reissuing AMMA statements to members for the income year (instead of using the unders and overs system to reconcile those variances (see Chapter 4)).

3.69 If the trustee of an attribution MIT issues revised AMMA statements to members, those revised AMMA statements effectively replace the original AMMA statements. [Schedule 1, item 1, subsection 276-455(4)]

3.70 However, a revised AMMA statement must be given to the member to whom it is addressed no later than four years after the end of the income year to which the AMMA statement relates. If a revised statement is given after the end of the four year period, it will not be an effective AMMA statement. [Schedule 1, item 1, subsection 276-460(3)]