ARTICLE · 22 AUGUST 2011

Australian-based fund managers made more attractive for foreign funds

DLA Piper Australia

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This update covers the release of exposure draft legislation in respect of the Investment Manager Regime and Fin 48 issue.

AustraliaTax

IMR

Overview

Certain returns and gains of eligible foreign funds – ie IMR foreign funds – will be treated as non-assessable non-exempt income, or disregarded where the fund does not have a place of business in Australia but is treated as having a permanent establishment in Australia solely as a result of engaging an Australian-based investment manager who habitually exercises authority to negotiate and conclude contracts on behalf of the fund.

The draft legislation is based on the Federal Government's announcement on 19 January 2011. It delivers changes to the income tax treatment of investment income of foreign managed funds, which will make it more attractive for foreign-based funds to use Australian-based fund managers.

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