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Australian Investment Manager Regime

Legislation introduced into Parliament

On June 21, 2012, the Australian government released the long awaited legislation to give effect to part of the Australian investment manager regime (IMR). The bill will be debated by the Australian Parliament shortly.

The bill addresses the so-called 'FIN 48' measure or 'Element 1' of the IMR. This will broadly, provide an exemption for all eligible income and gains of widely held foreign funds for periods up to June 30, 2011 where the fund has not lodged a tax return or had an assessment made of their income tax liability. This legislation gives effect to the government announcement of December 17, 2010.

Further, the measures will provide an exemption for all eligible income and gains of widely held foreign funds which would otherwise be Australian assessable income of the fund only because they are attributable to a permanent establishment in Australia which arises solely from the use of an Australian based agent, manager or service provider. This measure is referred to as the 'conduit income' measure or 'Element 2' of the IMR. This measure will apply from July 1, 2010. This gives effect to the government announcement of January 19, 2011.

We will issue a more detailed Alert in due course summarizing the key concepts and implications. In particular, the definitions of "IMR income" and "widely held" will be critical to determine whether the legislation achieves the government's objectives.

For additional information or questions, please contact:

Ted Dougherty
National Hedge Fund Tax Leader
Deloitte Tax LLP
+1 212 436 2165

David Watkins
Client Service Executive, Australia Desk
Deloitte Tax LLP
+1212 436 5867

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