Australian fund managers may become more attractive to foreign investors under the Investment Manager Regime (IMR) that passed through Parliament as part of the Tax Laws Amendment last week.
Investors will be exempt from some of the tax implications of using an Australian fund manager under the new regime which also seeks to address the impact of 'FIN 48' – US accounting on managed funds invested in Australia in the 2010-11 and earlier income years.
It also excluded tax on some income for investors that used an Australian fund manager, agent or service provider as well as provided clarity on the tax treatment of 'conduit income' of managed funds.
The Minister for Financial Services and Superannuation, Bill Shorten said Australia would become a more attractive destination for investment and employment in the financial services sector.
He said Australia's exports and imports of financial services would expand under the new regime which removed impediments for foreign investors.
Where entities conformed to the policy intent, the Government would ensure they benefitted from the new regime, according to Shorten.
"Consultation with industry has highlighted that it is not possible at this stage to define in legislation all the different investment entity structures operating in eligible offshore jurisdictions," he said.
The legislation implements the first two elements of the IMR and brings forward recommendations made in the Johnson report.
Industry is still consulting on the third element of the IMR which looks at the investment manager regime for foreign managed funds.
