On February 10, 2022, the Corporate Collective Investment Vehicles Bill 2021 and Other Measures passed parliament and now wait for approval.
What is a corporate collective investment vehicle?
A Corporate Collective Investment Vehicle (CCIV) is an investment vehicle with a new type of corporate structure for fund management, characterized by an apex company with all of its assets and liabilities separated into “compartments”. It is designed to be an alternative to the more common trust-based managed investment system. A CCIV also contains the added consumer protection of an independent custodian for retail funds who is responsible for overseeing certain administrative functions undertaken by the fund. A single CCIV can offer several investment products and strategies within the same investment vehicle.
• Schedules 1 to 4 — will establish the regulatory framework for the CCIV scheme, from 1 July 2022.
• Appendix 5 — will establish the tax framework for the CCIV scheme. The general objective of the CCIV is that the tax results for an investor in a sub-fund of the CCIV align with the existing tax treatment for an investor in an investment fund managed by attribution. These changes are intended to improve the international competitiveness of the Australian managed fund industry and attract greater levels of foreign investment to Australian capital markets.
• Appendix 6 — extends the temporary loss carryback measure at 12 months. This measure was introduced by the government in the 2020-2021 budget. The extension allows eligible businesses to claim loss carryback tax compensation in the 2022-23 revenue year. The government has introduced a temporary loss carry-forward in 2020 to support economic recovery by providing cash flow support to previously profitable businesses that have found themselves in a tax-loss situation as a result of the COVID-19 pandemic. 19. The law currently allows eligible businesses to carry forward tax losses from 2019-20, 2020-21 or 2021-2022 income years to offset previously taxed profits from 2018-2019 or later income years. Tax refunds are limited to previously taxed profits and the carry forward of losses cannot create a franking account deficit. Companies with aggregate revenue of less than $5 billion are eligible for temporary loss carryback in the election when they file their 2020-2021, 2021-2022 and now (with the adoption of this bill) their 2022-23 tax returns. Companies that choose not to carry forward losses under this temporary measure can still carry forward losses as usual. It is estimated that the extension of the temporary loss carryback will provide $2.8 billion in tax relief to businesses over the forward estimate.
• Annex 7 – modified Income Tax Assessment Act 1997 for modify the list of recipients of deductible donations remove The East African Fund Ltd, include the Greek Orthodox Community of New South Wales Ltd, Australian Associated Press Ltd, Virtual War Memorial Ltd and SU Australia Ministries Ltd, as well as expanding the specific lists of Cambridge Australia Scholarships Ltd and Foundation 1901 Ltd Deductible donor status allows the public to receive income tax deductions of $2 or more for donations made to these 6 organizations.
• Appendix 8 — amends some Treasury Portfolio Acts to ensure Treasury laws work as intended. These are minor edits to remedy any unintended consequences or correct any technical/editorial flaws.
• Annex 9 – modified Superannuation Industry (Supervision) Act 1993 for requiring trustees of pension funds to have a written retirement income strategy in place as of July 1, 2022. The strategy is designed to help their members who are retired or approaching retirement. In Budget 2018-19, the government committed to introducing a retirement income covenant to codify the long-standing expectation that trustees consider the retirement needs of their members. The strategy will be a high-level governance document and its implementation will be an ongoing process.
• Annex 10 – modified Income Tax Assessment Act 1997 for remove the termination tax point for tax-deferred employee stock ownership plans (ESS) accessible to all companies. These changes should help Australian businesses attract and retain talent. The changes will apply to new and existing SSE interests that have not yet reached a tax point, for employees who terminate employment from the first year of earnings after the date of assent.
Further details on the government’s consultation process on the CCIV Bill can be found on our Pinpoint ® platform here.
Sources: Federal Register of Legislation, Corporate Collective Investment Vehicles Framework and Other Measures Bill 2021accessed February 11, 2022.
Federal Register of Legislation, Corporate Collective Investment Vehicle Framework and Other Measures Bill, Explanatory memorandumaccessed February 11, 2022.
CCH Pinpoint®, Consultation on legislation relating to corporate collective investment vehiclesJanuary 17, 2022, accessed February 11, 2022.
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