|Notice under section 601GCB(2) of the Corporations Act 2001 (Cth)|
Click to download the notice
|Stockland Trust Constitution |
Click to download the current Stockland Trust Constitution, including AMIT changes
|Supplemental Deed (including amended Constitution) |
Click to download the Supplemental Deed (including amended Constitution) lodged with ASIC on 25 August 2017
Stockland Trust (ARSN 092 897 348) (“Trust”)
Amendment to the Trust Constitution to allow for adoption of the Attribution Managed Investment Trust ("AMIT") regime for the Trust
Notice under section 601GCB(2) of the Corporations Act 2001 (Cth)
This notice is published by Stockland Trust Management Limited (ACN 001 900 741) (“Responsible Entity”) under section 601GCB(2) of the Corporations Act 2001 (Cth) as modified by ASIC Instrument 2016/489 to inform members of the Trust that the constitution of the Trust (“Constitution”) was amended by Supplemental Deed on 25 August 2017. The amendments are in connection with the new tax regime applying to managed investment trusts which satisfy the requirements to be AMITs, which was introduced by the Tax Laws Amendment (A New Tax System for Managed Investment Trusts) Act 2016 (Cth) (“AMIT Regime”).
The AMIT Regime is a new set of rules for the taxation of managed investment trusts and their members. One of the aims of the AMIT Regime is to provide greater certainty than the current rules in relation to the taxation position for managed investment trusts and their members.
One key aspect under the AMIT Regime is that the Responsible Entity must allocate or “attribute” the taxable income of the Trust to members on a fair and reasonable basis. Currently, members are subject to tax on their proportionate share of the taxable income of the Trust based on the share of the income of the Trust according to trust law principles that they are presently entitled to.
The AMIT Regime may provide the following potential benefits for members of an AMIT:
Greater clarity and certainty associated with the tax treatment of distributions and the character of income and capital of the AMIT, in contrast to the current “present entitlement” regime. In particular, a removal of the potential for double taxation that may arise for members where there are mismatches between the amount distributed and the taxable income of the AMIT.
If a variance is discovered between the amounts actually attributed to members for an income year, and the amounts that should have been attributed, the variance can be attributed in the income year in which it is discovered by the responsible entity, rather than amending previous years' tax returns and notifying members of those amendments.
An AMIT will be deemed to be a “fixed trust” and members will be treated as having vested and indefeasible interests in the income and capital of the AMIT throughout the income year, which can be relevant for:
Where a member receives a distribution of cash that is less than their allocated share of the taxable trust components, members will be entitled to make upward adjustments to the cost base of their units in the AMIT.
Effect of the changes to the Constitution
The Constitution amendments have enabled the Responsible Entity to operate the Trust under the AMIT Regime.
A decision was made that the Trust would adopt the AMIT regime for the year ending 30 June 2018 onwards. When the AMIT Regime applies to the Trust, the key difference between the previous tax regime which applied to the Trust and the new AMIT Regime is that under the AMIT Regime, unit holders are taxed on the taxable income that is allocated or “attributed” to members by the Responsible Entity. The new AMIT Regime requires the Responsible Entity to undertake this allocation or attribution on a fair and reasonable basis. This is in contrast to the current rules, which provide for unit holders to be subject to tax to the extent, proportionately, that each unit holder is “presently entitled” to the income of the Trust according to trust law principles.
Details of the amendments to the Constitution are summarised in the table below, and a copy of the amended Constitution can be found at www.stockland.com.au/investor-centre/securityholder-information/taxation/amit.
|Constitution clause||Description of the amendment|
A new clause 9.7 has been inserted which provides that the Manager may establish principles to determine the manner in which trust components are allocated to members.
A new clause 9B has been inserted which contains the provisions for the operation of the Trust as an AMIT under the AMIT Regime, including to:
Powers in respect of the AMIT Regime
A new clause 11.12 has been inserted to specify the general rights and powers of the Responsible Entity to enable the Trust to be eligible to apply the AMIT Regime, be properly administered and operated under the AMIT Regime and for the Responsible Entity to comply with the AMIT Regime.
Limitation on Manager’s liability
A new clause 17.3 has been inserted which specifically provides that the Responsible Entity does not incur any liability as a result of an exercise of any power or discretion under the AMIT Regime.
Indemnity in favour of Manager
Clause 17.4 has been amended to clarify that the Responsible Entity is entitled to be indemnified for any liability incurred by it in properly performing or exercising its powers or duties under the AMIT Regime.
A new clause 18.7 has been inserted which provides for each member to indemnify the Responsible Entity in relation to any tax and any other costs, expenses or liabilities incurred as a result of being liable to such tax, that may become payable by the Responsible Entity under the AMIT Regime, which the Responsible Entity reasonably determines relates to the member or units held by the member.
Additional incidental changes have been made to the Constitution to facilitate the amendments, for example, to include specific definitions referable to the AMIT Regime in clause 28.1 (“Definitions”) of the Constitution.
The AMIT Regime is a new tax system which took effect from 1 July 2016. The AMIT Regime seeks to reduce complexity, increase certainty and minimise compliance costs for eligible managed investment trusts (“MIT”) and their members. A trustee of a MIT may elect into the AMIT Regime.
Stockland Trust Management Limited (“STML”) as responsible entity for Stockland Trust has elected into the AMIT Regime.
Prior to the introduction of the AMIT Regime, different types of trusts (e.g. family trusts and MITs) were subject to the same tax system. This tax system contains a number of uncertainties and unnecessary administration costs for MITs in practice. The AMIT Regime is intended to address these issues, as well as provide greater flexibility in the tax affairs of MITs.
Therefore, STML as responsible entity of Stockland Trust has elected into AMIT effective from the year ended 30 June 2018 onwards, to take advantage of the greater certainty and legislative protection afforded under the AMIT Regime in respect of its operation and administration.
Stockland Trust has applied the AMIT Regime from 1 July 2017. STML’s decision to elect Stockland Trust into the AMIT Regime is irrevocable.
The overall manner in which income of Stockland Trust is taxed should not change. Similar to how income of Stockland Trust has been taxed under the former tax system:
The AMIT Regime provides for a number of changes, including:
Further details of two of these key changes are set out below:
Allocation of Trust Taxable Income
Changes to Cost Base
You will continue to receive a single statement (now referred to as an AMIT Member Annual Statement or “AMMA statement”) covering all distributions in respect of your Stockland Trust securities.
No. You will report the different components of your share of Stockland Trust’s taxable income in the same way you were required to do so under the previous tax system.
No. No changes to Stockland Trust’s distribution policy will be implemented as a consequence of applying the AMIT Regime.
No. STML as responsible entity for Stockland Trust resolved in August 2017 that Stockland Trust would elect into the AMIT Regime with effect from 1 July 2017.
A notice setting out the changes to Stockland Trust’s constitution to facilitate the entry into the AMIT Regime along with the amended constitution have been published on Stockland’s website and can be found at www.stockland.com.au/investor-centre/securityholder-information/taxation/amit.