Tax Laws Amendment (2010 Measures No. 1) Act 2010 (56 of 2010)

Schedule 3   Managed investment trusts

Income Tax (Transitional Provisions) Act 1997

8   After Part 3-10

Insert:

Part 3-25 - Particular kinds of trusts

Division 275 Australian managed investment trusts

Table of Subdivisions

275-A Choice for capital treatment of MIT gains and losses

Subdivision 275-A - Choice for capital treatment of MIT gains and losses

Table of sections

275-10 Consequences of making choice - Commissioner cannot make certain amendments to previous assessments

275-10 Consequences of making choice - Commissioner cannot make certain amendments to previous assessments

(1) This section applies if:

(a) the trustee of a managed investment trust makes a choice under section 275-115 of the Income Tax Assessment Act 1997 covering the trust that is in force for the 2008-09 income year; and

(b) the Commissioner made an assessment (the previous assessment ) for a previous income year for any of the following entities:

(i) the trustee of the managed investment trust;

(ii) a beneficiary of the managed investment trust;

(iii) an entity that holds interests in the managed investment trust indirectly, through a chain of trusts; and

(c) the previous assessment was made on the basis that:

(i) a CGT event happened at a time involving a CGT asset that was owned by the managed investment trust; and

(ii) a gain or loss was realised for income tax purposes because of the circumstances that gave rise to the CGT event; and

(d) the previous assessment was also made on the basis that:

(i) the gain or loss should be reflected in the net income of the managed investment trust for that previous income year; or

(ii) the gain or loss should be reflected in a tax loss or net capital loss of the managed investment trust for that previous income year; and

(e) the previous assessment was also made on one of these bases:

(i) the CGT asset was a revenue asset;

(ii) the CGT asset was not a revenue asset; and

(f) none of the provisions mentioned in subsection 275-100(2) of the Income Tax Assessment Act 1997 would have applied at the time of the CGT event in relation to the asset, if these assumptions were made:

(i) Subdivision 275-B of the Income Tax Assessment Act 1997 (and any other provision of that Act or of the Income Tax Assessment Act 1936, to the extent that it relates to that Subdivision) had applied in relation to the CGT event;

(ii) a choice under section 275-115 of the Income Tax Assessment Act 1997 covering the entity for which the assessment was made was in force for the previous income year.

(2) The Commissioner cannot amend the previous assessment on the basis that:

(a) if subparagraph (1)(e)(i) applies - the CGT asset should not have been treated as a revenue asset; or

(b) if subparagraph (1)(e)(ii) applies - the CGT asset should have been treated as a revenue asset.

(3) Subsection (2) applies despite any other provision of this Act (apart from subsection (4) of this section), the Income Tax Assessment Act 1997 and the Income Tax Assessment Act 1936.

(4) Subsection (2) does not apply in any of these cases:

(a) if the entity for which the assessment was made gives the Commissioner a written consent to the amendment;

(b) if the Commissioner may amend the assessment in accordance with item 5 (fraud or evasion) or 6 (review or appeal) of the table in subsection 170(1) of the Income Tax Assessment Act 1936;

(c) if the amendment is made for the purpose of giving effect to a provision specified in the regulations for the purposes of this paragraph.