where cross staple rent can be traced to an amount of third party rent from land investment charged by an operating entity.

There are four circumstances in which an amount that is attributable to a cross staple arrangement will not be MIT cross staple arrangement income of a MIT.

amounts which are not Australian sourced income.

net capital gains in relation to a CGT asset that is not taxable Australian property.

the amount of assessable income is not an amount that is excluded from being a fund payment of a MIT – broadly, amounts that are not a fund payment of a MIT include:.

the amount of assessable income is, or is attributable to, an amount that is derived, received or made directly or indirectly through interposed entities from an operating entity under a cross staple arrangement.

the MIT has an amount of assessable income for that income year.

Therefore, the lease entered between Asset Trust and Op Co is a cross staple arrangement.Įnd of example What is MIT cross staple arrangement income?Ī MIT will have an amount of MIT cross staple arrangement income in relation to an income year if:.

Investor A and B, which are entities that are not parties to the cross staple arrangement, together hold 100% of the participation interests in Asset Trust and Op Co.

Investor B holds 70% of the units in Asset Trust and 70 per cent of the shares in Op Co.

Investor A holds 30% of the units in Asset Trust and 30 per cent of the shares in Op Co.

the sum of the total participation interests held by the external entities in each arrangement entity is 80 per cent or more.Īsset Trust is an asset entity and Op Co is an operating entity.

one or more other entities who are not party to the cross staple arrangement (the external entities) each hold a total participation interest in each arrangement entity (that is, in both the asset entity and the operating entity).

at least one of the arrangement entities is an operating entity.

at least one of the arrangement entities is an asset entity.What is a cross staple arrangement?Ī cross staple arrangement is an arrangement that is entered into by two or more entities (the arrangement entities) if: MIT cross staple arrangement incomeĪ MIT will have an amount of MIT cross staple arrangement income if, broadly, it derives, receives or makes an amount that is attributable to a cross staple arrangement between an operating entity and an asset entity. Transitional rules apply to appropriate existing arrangements from the impact of the amendments. To improve the integrity of the income tax law for arrangements involving stapled structures and to limit access to tax concessions for foreign investors, the managed investment trust (MIT) withholding rate on fund payments that are attributable to non-concessional MIT income has been changed to 30%.Īn amount of a fund payment will be non-concessional MIT income if it is attributable to income that is: Stapled Groups – Choice to apply transitional provisions.

Stapled Groups – Approved economic infrastructure facility exception.The following forms will allow you to apply transitional provisions exceptions: The following pages include information on the choices and forms available for stapled groups in respect of transitional cross staple arrangements and approved economic infrastructure facilities. This page focuses on Non-concessional MIT income (NCMI) - specifying the MIT withholding rate on income attributable to non-concessional MIT income is 30%. Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019 (Stapled Structures Act) introduced a number of measures to address risks posed by stapled structures and similar arrangements and limit access to concessions currently available to foreign investors for passive income.

Meaning of stapled