Draft Public Trading Trust Legislation – Falls Short Of Property Industry Expectations

After 23 years and extensive industry consultation the Federal Treasury has released draft legislation to amend the public trading trust rules. The Government has promised that the new legislation will reduce compliance costs for managed investment trusts and will resolve some of the uncertainty around the key features of the current law.

The key features of the draft legislation provides for the following changes:

• clarifying the scope and meaning of investment in land for the purpose of deriving rent;

• introducing a 25% safe harbour allowance for non-rental, non trading income from investments in land (however, beware the fine print!);