Politics & Regulation Tax & Legal

Tax issues hamper inflows into hedge funds in Australia


Hedge funds are unlikely to benefit from upcoming tax changes for domestic managed investment trusts (MITs) in Australia, according to industry sources, who say that overseas inflows into Australian hedge funds are being hampered by a narrow definition of the funds entitled to the beneficial revisions.

Damien Hatfield

The Australian government will lower the withholding tax rate on payments distributed from Australian MITs to overseas investors, from 15% to 7.5% on 1 July 2011. However, hedge funds and private equity vehicles do not fall under the proposed classification of MITs, which are defined as managed investment schemes