Australian Corporate Collective Investment Vehicle Regime draft legislation

On Friday 27 August the Treasurer and the Assistant Treasurer announced the release of draft Legislation for public consultation on tax and regulatory aspects of the proposed new Corporate Collective Investment Vehicle Regime (CCIV) Regime with a view to implementation from 1 July 2022.

The proposed CCIV Regime would introduce an alternative investment vehicle largely similar to and aligned with the existing Attribution Management Investment Trust (AMIT) Regime. This initiative is intended to position Australia’s Managed Funds Industry as more competitive internationally and most particularly, attract more foreign capital into our Australian based Managed Funds. The flexible and competitive CCIV Regime was originally proposed as part of the 2016/17 Federal Budget and the various regulatory and tax aspects of the earlier proposed CCIV Regime have been refined to ensure the Regime is flexible and attractive for international investment.

The highlights of the proposed new CCIV Regime which will provide a new type of company limited by shares, include that it will:

1. Provide a new ‘flow-through’ vehicle (other than a trust structure) which is equivalent in tax treatment to the existing AMIT Regime.
2. Allow different sub-funds of the CCIV to provide multiple products and investment strategies within the same vehicle.
3. Provide flexibility to cross invest between different sub-funds. 
4. Allow a potential listing of a retail CCIV with one sub-fund.
5. Provide access to the Capital Account Election.

The principal tax related amendments are contained in new Subdivision 195-C which effectively deems a trust relationship to exist between the CCIV, the business, assets and liabilities referable to each sub-fund, and the relevant class of members, for purposes of all tax laws (unless specifically excluded for example Foreign Acquisitions and Takeovers Act 1975). The new CCIV Regime could potentially be utilised for a broad range of collective investment activities across infrastructure, real estate, equities and certain alternative assets.

A consultation period has been provided through to 24 September 2021 and the Government is committed to establishing the new Regime by 1 July 2022.

Should you have any queries about this draft legislation and the implications, please contact our Australian tax team.