Attribution Managed Investment Trust

An AMIT is a managed investment trust that has made an irrevocable election to apply the new AMIT regime. Transurban Holding Trust has elected to apply the AMIT regime for the income year commencing 1 July 2016 following the receipt of approval from security holders at the Annual General Meeting held on 13 October 2016.

Prior to the introduction of the AMIT regime, trusts with different characteristics were subject to the same set of tax laws (e.g. family trusts, discretionary trusts and large managed investment trusts). The Board of Taxation reviewed the application of these tax laws and identified that the current tax arrangements created a level of complexity and uncertainty when applied to managed investment trusts. The AMIT regime was introduced to provide AMITs with certainty and to reduce complexity and the compliance burden.

The key features of the new AMIT regime are as follows:

• Allows AMITs to use an attribution method to allocate taxable income to unitholders (instead of the previous present entitlement tests);
• Provides certainty that the AMIT is treated as a fixed trust for tax purposes;
• Provides access to a legislated ‘unders and overs’ regime to determine the attributable taxable components to unitholders, generally allowing AMITs to reconcile prior years variances without the need to issue new distribution statements to unitholders. This means that unitholders are not required to lodge amended tax returns; and
• Prevents double taxation by allowing unitholders to make upward adjustments to their cost base where the AMIT distributes an amount that is less than its taxable income. Unitholders may also have to make downward adjustments to the cost base of their units (similar to the treatment of tax deferred distributions). These adjustments are referred to as the net cost base increase amounts and net cost base decrease amounts. An example of these adjustments is included in the 2019 Transurban Tax Guide.

No. The AMIT regime will not change the manner in which Transurban Holding Trust’s income is taxed.

Under the previous trust tax regime, unitholders were allocated a share of the taxable income of the trust in proportion to their present entitlement to the income distributed (based on their units held to total units issued).

Under the AMIT regime, unitholders will be taxed on member components (components of taxable income) that are attributed to them on a fair and reasonable basis in accordance with the trust’s constituent documents. Transurban Holding Trust’s trustee is able to attribute the components of taxable income to unitholders in a manner that is consistent with prior years.  Therefore the application of the AMIT regime will not impact the allocation of Transurban Holding Trust’s taxable income.

The components of Transurban Holding Trust’s distribution will be set out in an AMIT member annual statement (AMMA Statement) that will be issued to unitholders shortly after the end of each financial year. 

In preparing their income tax returns, unitholders can nominate a different component if they believe the attribution of Transurban Holding Trust’s taxable income by the trustee is not fair and reasonable or inconsistent with the trust deed and constitution of Transurban Holding Trust.  The unitholder is required to prepare a written notice to the Commissioner of Taxation and to Transurban Holding Trust within 4 months of the end of the unitholder’s income year outlining, amongst other things, the reason for the variation. 

In this regard, provided the trustee has attributed amounts on a fair and reasonable basis, the allocation of the member components will stand.  Transurban Holding Trust is of the view that its attribution methodology is fair and reasonable given published ATO guidance on this matter.

Should you wish to contact us in respect of Transurban Holding Trust’s attribution methodology, please address your query to: investor.relations@transurban.com

Under the previous trust tax regime, unitholders were required to make downward adjustments to the cost base of their units for that part of a distribution that exceeded the unitholder’s share of a trust’s taxable income (commonly referred to as tax deferred distributions).  Where a unitholder’s unit cost base has been reduced to nil, any additional reduction to the unit cost base will trigger a capital gain. The new AMIT regime will retain this decreasing cost base adjustment requirement.

The new AMIT regime provides that unitholders increase the cost base of units in Transurban Holding Trust where the cash distributed is less than its taxable income (before the application of the CGT discount).

The Annual Tax Statement, which also serves as the AMMA Statement for units held in THT, will set out the total annual cost base adjustments required to be made by unitholders.

The Transurban Tax Statement Guides will assist security holders in understanding the share of Transurban Holding Trust’s taxable income attributed to them for the purposes of determining the net cost base amount to be adjusted for each parcel of their Transurban Holding Trust units.  

Transurban Holding Trust will continue to issue you with an Annual Tax Statement.  This statement will also act as your AMMA Statement that will set out the different member components of your share of Transurban Holding Trust’s taxable income.  The Annual Tax Statement has been altered slightly to accommodate this change.

For further details on the different components and tax return labels, you may wish to refer to the Transurban Tax Statement Guides.

However each security holder’s particular circumstances will be different and accordingly you should seek independent tax advice. 

If you have any further tax questions in relation to the new AMIT regime and how that might affect your investment in Transurban Holding Trust, we recommend you consult your tax adviser or refer to the information from the ATO website at https://www.ato.gov.au/general/trusts/in-detail/managed-investment-trusts/managed-investment-trusts---overview/?page=7#NewtaxsystemforMITs

This publication is prepared by the Transurban Group comprising Transurban Holdings Limited (ACN 098 143 429), Transurban Holding Trust (ARSN 098 807 419) and Transurban International Limited (ARBN 121 746 825). The responsible entity of Transurban Holding Trust is Transurban Infrastructure Management Limited (ACN 098 147 678) (AFSL 246 585).

This publication has been prepared by the Transurban Group based on the information available. No representation or warranty, expressed or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions, inputs, calculations and conclusions contained in this publication. To the maximum extent permitted by law, none of the Transurban Group, their directors, employees or agents, or any other persons accepts any liability for any loss arising from the use of this publication or its contents or otherwise arising in connection with it, including without limitation, any liability arising from fault or negligence on the part of any member of the Transurban Group, their directors, employees or agents.

The information contained in this publication does not take into account the investment objectives, financial situation and particular needs of any investor. Further, the Guide is not intended in any way to influence a person into the varying, acquisition or disposal of a financial product nor provide financial advice nor constitutes an offer to subscribe for securities in any entity including the Transurban Group.

This publication does not constitute the provision of tax advice. Any person intending on acquiring an interest in the Transurban Group or providing reliance on this publication is strongly recommended to seek professional advice.

The Transurban Group does not warrant or guarantee the performance, repayment of capital or a particular return of the Transurban Group.