Collapsed Managed Investment Schemes and Tax Consequences

The Tax Office has released three draft determinations, which set out the Commissioner’s preliminary views on the tax consequences for investors with interests in collapsed managed investment schemes (MISs).

The tax consequences are:

• a change of responsible entity of a registered agricultural MIS does not affect the tax outcomes for a participant if the scheme continues to be implemented in accordance with the relevant product ruling;
• a disposal of an interest in a non-forestry MIS that arises as a result of circumstances beyond the control of a participant will not result in the denial of deductions previously allowed; and
• a payment received by a participant in a non-forestry MIS upon the winding-up of the scheme, which does not involve a disposal of the participant’s interests to another person, may constitute assessable income depending on the nature of the payment.