Is your trust really a managed investment trust?

If you operate a trust, it’s important to know exactly what kind of trust it is. This helps you report your trust details correctly when you lodge your tax return.

managed investment trust (MIT) is a type of trust where members collectively invest in passive income activities, such as shares, property or fixed interest assets.

It’s important to know that only certain trust types can qualify as managed investment trusts (MITs). Discretionary trusts, family trusts, and deceased estates cannot qualify as an MIT, even if they hold passive investments.

Here’s some tips to help you check that your trust meets the requirements before you nominate it as an MIT in your tax return.

All the following must apply for the whole income year for your trust to qualify as a MIT:

  • The trustee must be an Australian resident, or the central management and control of the trust must be in Australia.
  • The trust can’t carry on or control an active trading business (for example, if your trust operates a takeaway shop, your trust does not qualify as an MIT).
  • The trust must be a managed investment scheme, widely held, and operated or managed by an entity with an Australian Financial Services Licence, or a Crown entity.

For more information on all the MIT eligibility requirements, visit the ATO website.


Source: ATO Newsroom

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