11 Taxation

11

Section 11 Taxation

A summary of the general Australian taxation considerations for The Fund and Unitholders in The Fund is set out below. The taxation information provided below is intended only as a brief guide. The information applies only to current and prospective Unitholders of The Fund who are:

• are Australian tax resident individuals; • are subject to Australian tax (that is, are not exempt from Australian tax); and • hold their investments on capital account.

This summary does not consider the Australian tax considerations that may be relevant for:

• Unitholders in The Fund who are not Australian tax resident individuals; • Unitholders who hold (or will hold) Stapled Units in The Fund as trading stock or on revenue account, or who are exempt from Australian income tax, or are subject to the Taxation of Financial Arrangements (TOFA) rules in Division 230 of the Income Tax Assessment Act 1997; • Financial institutions, insurance/life insurance companies, partnerships, tax exempt organisations or temporary residents; • Dealers in the Stapled Units; • Australian residents who hold their Stapled Units as part of an enterprise carried on at or through a permanent establishment in a foreign country; • Unitholders who change their tax residence while holding Stapled Units; or • Unitholders who invest indirectly into The Fund through directed portfolio services, master funds or other portfolio administration services.

The comments below are based on the relevant taxation laws in the Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997, A New Tax System (Goods & Services Tax) Act 1999, the Income Tax Rates Act 1986 and the Taxation Administration Act 1953 (referred to collectively herein as the Australian Tax Act) as at the date of this document and the associated administrative instruments, except where otherwise indicated.

The information below is based on existing tax law and established interpretations as at the date of this PDS. The taxation of unit trusts such as those that make up The Fund can be complex and may change over time. Accordingly, Unitholders are recommended to seek professional taxation advice in relation to their own position.

Australia is in the process of major tax reform. It is possible that future legislation or changes made to the administration interpretation of the existing law will affect the matters considered in this summary.

The information contained in this document does not constitute “financial product advice” within the meaning of the Corporations Act 2001 (Cth) (Corporations Act). To the extent that this document contains any information about a “financial product” within the meaning of the Corporations Act, taxation is only one of the matters that must be considered when making a decision about the relevant financial product. This summary has been prepared for general circulation and does not take into account the objectives, financial situation or needs of any recipient of the PDS. Accordingly, any recipient should before acting on this material, consider taking independent financial advice from a person who is licensed to provide financial product advice under the Corporations Act.

TAXATION OF THE FUND Overview

Each Stapled Unit consists of one unit in each of the 360 CEIT and 360 CEAT, collectively referred to as “the Trusts” in this summary.

The summary provided below is on the basis that the Responsible Entity of 360 CEIT will make the Attribution managed investment Trust (AMIT) election and the managed investment Trust (MIT) capital gains tax election in respect of 360 CEIT.

For tax purposes the Trusts are treated as separate entities. The tax treatment of each of the Trusts is considered separately below.

Section 11 Taxation

Taxation of 360 CEIT General

Generally speaking, a unit trust such as 360 CEIT is treated as a ‘flow through’ entity for income tax purposes. Accordingly, the Responsible Entity of 360 CEIT should generally not be liable to pay income tax on the net (i.e. taxable) income of 360 CEIT on the basis that the Unitholders will have a present entitlement to all of the income of 360 CEIT (if 360 CEIT is not an AMIT or a public trading trust), or all of the taxable income and tax offsets of 360 CEIT are fully attributed to Unitholders (if 360 CEIT is an AMIT and is not a public trading trust). Consequently, the Unitholders will be the persons who will be taxed on the taxable income of 360 CEIT.

Public Trading Trust Rules The taxation treatment for 360 CEIT will depend on whether 360 CEIT is a “public trading trust” under Division 6C of the Income Tax Assessment Act 1936 during a particular income year. In order to be treated as a public trading trust for a particular income year, 360 CEIT must be both a public unit trust and a trading trust for that income year.

Generally, a unit trust is a public unit trust in relation to a year of income if any of the following are satisfied at any time during the year:

(a) any of the units were listed for quotation in the official list of a stock exchange in Australia or elsewhere; (b) any of the units were offered to the public; (c) the units in the trust were held by not fewer than 50 persons; or (d) units carrying entitlement to 20% or more of the income or property of the trust are effectively owned by ‘exempt entities’.

On the basis that the Stapled Units in The Fund will be offered to the public, 360 CEIT should be a public unit trust and this summary has been prepared on this basis. A unit trust is a trading trust if at any time during the income year, the trustee carried on or was able to control a ‘trading business’. A trading business is any activity other than ‘eligible investment business’. Broadly, eligible investment business includes investing or trading in all or any of a number of categories of debt securities and derivatives, investing or trading in units in a unit trust or shares in a company (including shares in a foreign hybrid company as defined in the Australian Tax Act), or investing in land for the primary purpose of deriving rental income.

Based on the information in this PDS regarding the proposed activities of 360 CEIT, 360 CEIT should not derive income other than from an eligible investment business for income tax purposes (including controlling, or being able to control, a ‘trading business’). Therefore, 360 CEIT should not be regarded as a public trading trust. We note that the requirements for a public trading trust are ongoing so that the tax position of 360 CEIT in any year will depend on the actual operations in that year.

On the basis that Division 6C does not apply to 360 CEIT, 360 CEIT should be a “flow through” entity for tax purposes such that the net income of 360 CEIT will be taxable in the hands of the Unitholders. If 360 CEIT has taxable income, Unitholders will generally be liable for tax on their share of the taxable income and tax offsets of 360 CEIT at their own applicable tax rates. Provided 360 CEIT continues to fall outside the public trading trust rules in Division 6C, 360 CEIT should not be liable to tax in its own right.

AMIT Aspects 360 CEIT is expected to qualify as a MIT for Australian tax purposes. For 360 CEIT to qualify as a MIT in relation to an income year, 360 CEIT must satisfy a number of conditions including conditions relating to being widely held by Unitholders. The Responsible Entity believes that 360 CEIT will satisfy the conditions for 360 CEIT to be a MIT including the widely held conditions.

If eligible, the Trusts may elect to become an AMIT. The Responsible Entity intends to make an election for 360 CEIT to be an AMIT, where it is able to do so. Unitholders will be advised if the election is made. This summary has been written on the basis that the election is made.

If Responsible Entity elects for 360 CEIT to enter into the AMIT regime, the following will apply:

(a) Fair and reasonable attribution Each year, 360 CEIT’s ‘determined trust components’ of assessable income, exempt income, non-assessable non exempt income and tax offsets (i.e. tax credits) will be ‘attributed’ to Unitholders on a ‘fair and reasonable’ basis, having regard to their income and capital entitlements under the Constitution and certain other secondary information.

(b) ‘Unders’ or ‘Overs’ timing adjustments Where the determined trust components of 360 CEIT for a year are revised in a subsequent year (e.g. due to actual amounts differing to the estimates of income, gains/losses or expenses), then ‘unders’ and overs’ may arise. ‘Unders’ and ‘overs’ will generally be carried forward and adjusted as timing differences in the year of discovery, as opposed to amendments being required to tax returns of the relevant income year subject to revision (although the Responsible Entity is able to choose to do so).

(c) Cost base adjustments to mitigate anomalous tax outcomes Where the distributions made by 360 CEIT are less than (or more than) certain tax components attributed to Unitholders, then the tax cost base of a Unitholder’s units may be increased (or decreased). These adjustments mitigate double taxation (or the underpayment of tax). In certain circumstances, capital gains may be specifically allocated to Unitholders (e.g. where a large redemption triggers capital gains in 360 CEIT). Details of the net annual tax cost base adjustment will be included in each Unitholder’s annual tax statement referred to as an ‘AMIT Member Annual Statement’ (AMMA).

MIT Capital Account Election A MIT (such as 360 CEIT, if the necessary conditions are met as expected) has certain tax advantages which may be categorised as the ability to make a capital account election and reduced withholding tax on distributions to certain nonresident investors. MITs may elect to treat eligible investments (such as shares, units and real property) on capital account, which provides certainty on the tax treatment of disposals of these assets in that they will always be dealt with under the capital gains tax (CGT) rules, rather than the ordinary income rules. The remainder of this summary assumes 360 CEIT will qualify as an MIT and the Responsible Entity will make a valid capital account election.

Tax Losses Where a revenue loss or net capital loss is incurred by 360 CEIT, the loss must be quarantined within the trust and cannot be passed to Unitholders for tax purposes. Instead, revenue tax losses should be able to be carried forward and offset against assessable income derived by 360 CEIT in future years subject to satisfying the relevant trust loss recoupment tests.

Any net capital losses should be able to be carried forward and offset against future capital gains derived by 360 CEIT. There are no restrictions on utilising carried forward net capital losses incurred by a trust.

Tax Treatment of 360 CEAT General

Based on the information in this PDS regarding the proposed activities of 360 CEAT, it is expected that 360 CEAT should derive income other than from an eligible investment business for income tax purposes. In particular, 360 CEAT is expected to hold assets where it controls (or be able to control) directly or indirectly, the affairs or operations of another entity that carries on a trading business. Therefore, 360 CEAT should be regarded as a trading trust (refer to ‘Public Trading Trust Rules’ section above for further details on these rules).

On the basis that 360 CEAT will also constitute a public unit trust (as the Stapled Units in the Fund will be offered to the public and are expected to be held by 50 persons or more) and therefore a public trading trust, the consequences of being a public trading trust will be that 360 CEAT will be treated as a company for most income tax purposes. We note that the requirements for a public trading trust are ongoing so that the tax position of 360 CEAT in any year will depend on the actual operations in that year. Broadly, the effects of 360 CEAT being a public trading trust are outlined below.

360 CEAT will be considered to be a separate taxable entity from Unitholders and will be liable to Australian income tax at the top corporate rate on its net income (currently 30%, or at the rate of 27.5% where it qualifies as a ‘base rate entity’ - broadly a base rate entity is an entity where no more than 80% of its assessable income is ‘base rate entity passive income’ (eg. dividends and interest), and its annual aggregated turnover is less than $50 million). This reduces the amount available for distribution to Unitholders.

360 CEAT will receive franking credits for the amount of any tax paid and these are used to frank distributions to investors (similar to franking of company dividends).

Distributions to investors will be assessable on the same basis as dividends paid to shareholders. That is, distributions will be grossed up for any franking credits, which will be included in the investor’s assessable income in the year in which distributions are made (refer to ‘Dividends and Imputation’ section below).

Section 11 Taxation

Dividends and Imputation 360 CEAT will be required to maintain a franking account which records franking credits and franking debits. Franking credits typically arise on the payment of income tax or on the receipt of a franked dividend. Franking debits typically arise on the receipt of a refund of income tax or on the payment of a franked dividend. 360 CEAT may pay a franked distribution to investors where franking credits are allocated to the distribution.

Tax Losses Where a revenue loss or net capital loss is incurred by 360 CEAT, the loss must be quarantined within the trust and cannot be passed to Unitholders for tax purposes. Instead, revenue tax losses should be able to be carried forward and offset against assessable income derived by 360 CEAT in future years subject to satisfying the relevant trust loss recoupment tests.

Any net capital losses should be able to be carried forward and offset against future capital gains derived by 360 CEAT. There are no restrictions on utilising carried forward net capital losses incurred by a trust.

Note that if 360 CEAT chooses to be the head entity of a tax consolidated group, then the company loss recoupment rules will be relevant to determine whether 360 CEAT can recoup revenue or capital losses.

TAXATION OF AUSTRALIAN TAX RESIDENT UNITHOLDERS Taxation in respect of 360 CEIT

On the basis that 360 CEIT elects to be an AMIT, then the AMIT provisions require the taxable income of 360 CEIT to be attributed to Unitholders on a fair and reasonable basis, having regard to their income and capital entitlements under the Constituent documents of 360 CEIT. For each year that 360 CEIT is an AMIT, the Responsible Entity will seek to allocate the taxable income of 360 CEIT to Unitholders on a fair and reasonable basis.

Unitholders will be subject to tax on the taxable income of 360 CEIT that is attributed to them. Unitholders will receive an AMMA tax statement after the end of each financial year providing them with details of the amounts that have been attributed to them by 360 CEIT to assist in the preparation of their tax return.

Attributed amounts from 360 CEIT may include various components, the taxation treatment of which may differ. For example, an attributed amount from 360 CEIT to Unitholders may include Australian interest and other income components, a dividend component (including franking credits), a foreign income component (including foreign income tax offsets (FITOs)), as well as net capital gains.

Franking Credits Australian resident Unitholders will generally include any franking credits attached to the dividend component of a distribution as assessable income (subject to 360 CEIT being eligible to pass through franking credits). Where franking credits are included in a Unitholder’s assessable income, the Unitholder will generally be entitled to a corresponding tax offset.

Relevantly, to be eligible for the franking credit and tax offset, the Responsible Entity must be a ‘qualified person’ in relation to the underlying shares, which means that the Responsible Entity, as the Responsible Entity of 360 CEIT, must have held the shares at risk for a period of at least 45 days in the case of ordinary shares (and 90 days in the case of preference shares). In addition, and provided that 360 CEIT is treated as a widely held trust for these purposes, the Unitholder must have held its interest in the 360 CEIT Units ‘at risk’ for at least 45 days or 90 days respectively, not including the date of the 360 CEIT Units’ acquisition or disposal (refer to the ‘Shares held “at risk”’ section below for further details). If 360 CEIT is not a ‘fixed trust’ or cannot (or the Responsible Entity does not) elect to become an AMIT for taxation purposes, 360 CEIT may not be eligible to pass through franking credits on dividends received.

Assuming franking credits can be passed through, the individual Unitholder may be entitled to a refund to the extent that the franking credits attached to the Unitholder’s distributions exceed the Unitholder’s tax liability for the income year.

FITOs Where foreign income tax has been deducted from foreign source income, an Australian resident Unitholder may be entitled to a FITO. Australian resident Unitholders will include any FITO attached to a foreign income component of an attributed amount as assessable income (subject to 360 CEIT being eligible to distribute the FITO). Where a FITO is included in a Unitholder’s assessable income, the Unitholder will generally be entitled to a corresponding non-refundable tax offset (subject to certain limits).

Difference between cash and tax amounts For a given income year, Unitholders could receive cash distributions that are greater or less than the taxable amounts reported to them.

Broadly, where the cash amount distributed exceeds the taxable income attributed to a Unitholder, the Unitholder’s tax cost base in its 360 CEIT Units is reduced by the amount of the excess. If the cost base is reduced to zero, further reductions are assessable as a realised gain to the Unitholder. Additional reductions are made for certain tax offsets, such as franking credits and FITOs. Conversely, when the taxable income attributed to a Unitholder exceeds the cash amount distributed, the excess amount can be taxed again when distributed. To mitigate double taxation, under the AMIT regime, the Unitholder’s tax cost base is increased accordingly.

The net annual tax cost base adjustment amount (the AMIT cost base net amount) will be detailed in an AMMA tax statement, which will be sent annually to Unitholders after year-end.

Disposal of assets by 360 CEIT On the basis that 360 CEIT has made the capital account election, where a CGT asset is owned by 360 CEIT for at least 12 months is disposed of, 360 CEIT will receive a 50% CGT discount on the capital gain realised (subject to the ‘Proposed Law Changes’ outlined below). Where a trust distribution includes a capital gain component, the capital gain will be comprised of: • A discount capital gain – amounts attributed of a character relating to “discounted capital gains” represents assessable net capital gains that have been subject to a 50% CGT discount; and • A CGT gross up amount – this component represents the additional amount treated as a capital gain (due to the 50%

CGT discount) and should broadly be double the discount capital gain attributed. Note: the AMIT CGT gross up amount should not be included in your assessable income, however the AMIT CGT gross up amount should increase the cost base of your 360 CEIT Units. Proposed Law Changes Under proposals announced in the 2018-19 Budget on 8 May 2018 (and as revised at the 2018-19 MYEFO in respect of the commencement date), the Government intends to prevent MITs and AMITs from applying the discount capital gains treatment at the trust level. This measure is intended to apply from 1 July 2020 although draft legislation to enact this measure has yet to be released. If this measure is enacted and 360 CEIT qualifies as a MIT in respect of a financial year, the Responsible Entity of 360 CEIT will attribute gross capital gains as assessable amounts, such that the discount capital gains treatment is not applied at the 360 CEIT level but only at the Unitholder level.

Taxation in respect of 360 CEAT

On the basis that 360 CEAT qualifies as a public trading trust in each income year (or is the head entity of a tax consolidated group), then distributions paid by 360 CEAT (referred to as ‘dividends’ in this summary) may be paid to Unitholders by 360 CEAT. 360 CEAT may attach ‘franking credits’ to dividends paid on the 360 CEAT Units. Franking credits broadly represent the extent to which a dividend is paid by 360 CEAT out of profits that have been subject to Australian tax. It is possible for a dividend to be fully franked, partly franked or unfranked.

Dividends paid by 360 CEAT on 360 CEAT Units will constitute assessable income of an Australian tax resident Unitholder. Australian tax resident Unitholders who are individuals should include the dividend in their assessable income in the year the dividend is paid, together with any franking credit attached to that dividend. Such Unitholders should be entitled to a tax offset equal to the franking credit attached to the dividend subject to being a “qualified person” (refer to further comments below). The tax offset can be applied to reduce the tax payable on the Unitholder’s taxable income. Where the tax offset exceeds the tax payable on the Unitholder’s taxable income in an income year, such Unitholders should be entitled to a tax refund.

To the extent that the dividend is unfranked, the Unitholder will generally be taxed at their prevailing marginal tax rate on the dividend received with no tax offset.

Shares held “at risk”

The benefit of franking credits can be denied where a Unitholder is not a “qualified person”, in which case the Unitholder will not be able to include an amount for the franking credits in their assessable income and will not be entitled to a tax offset.

Section 11 Taxation

Under the holding period rule, a Unitholder is required to hold the Stapled Units “at risk” for more than 45 days continuously (which is measured as a period of at least 45 days, commencing the day after the Stapled Units were acquired and ending on the 45th day after the Stapled Units become ex-dividend) in order to be eligible to use franking credits. The date the Stapled Units are acquired and disposed of are ignored for the purposes of determining the 45 day period. Any day on which a Unitholder has a materially diminished risk of loss or opportunity for gain (through transactions such as granting options or warrants over Stapled Units or entering into a contract to sell the Stapled Units) will not be counted as a day on which the Unitholder held the Stapled Units “at risk”. This holding period rule is subject to certain exceptions, including where the total franking offsets from all sources of an individual in a year of income does not exceed $5,000.

Under the related payment rule, a different testing period applies where the Unitholder has made, or is under an obligation to make, a related payment in relation to a dividend. A related payment is one where a Unitholder or their associate passes on the benefit of the dividend to another person. The related payment rule requires the Unitholder to have held the Stapled Units “at risk” for the continuous 45 day period as above and, more specifically, within the limited period commencing on the 45th day before, and ending on the 45th day after, the day the Stapled Units become ex-dividend. Practically, this should not impact Unitholders who do not pass the benefit of the dividend to another person.

These rules will be specific to each Unitholders’ personal facts and circumstances. Accordingly, Unitholders should seek professional tax advice to determine if these requirements, as they apply to them, have been satisfied.

Disposal of Stapled Units

For CGT purposes, the disposal of a Stapled Unit involves the disposal of two separate assets, being a unit in each of the Trusts (the Component Securities). Broadly, the Unitholder must include any realised capital gain or loss on the disposal of their Stapled Units in the calculation of their net capital gain or loss for the year. The tax consequences must be worked out separately for each Component Security.

A Unitholder will derive a capital gain on the disposal of the Component Securities to the extent that the capital proceeds on disposal exceed the CGT cost base of the Component Securities. A Unitholder will incur a capital loss on the disposal of the Component Securities to the extent that the capital proceeds on disposal are less than the CGT reduced cost base of the Component Securities.

The capital proceeds received on the disposal of a Stapled Unit must be apportioned between the Component Securities on a reasonable basis. The CGT cost base of each Component Security will include the amount paid to acquire the Stapled Units, together with any capital costs of acquisition or disposal, allocated to each Component Security on a reasonable basis. The cost base of 360 CEIT Units will be adjusted for any AMIT cost base net amounts in respect of that particular Component Security, and the cost base of 360 CEAT Units will be reduced by any returns of capital made by 360 CEAT in respect of that particular Component Security.

For the purposes of allocating capital proceeds and CGT cost base to each Component Security, one basis of apportionment is to use the relative net asset value (NAV) of each entity.

All capital gains and capital losses arising in a year, including distributions of capital gains, are added together to determine whether a Unitholder has derived a net capital gain or incurred a net capital loss in that year. If a Unitholder derives a net capital gain in a year, this amount is, subject to the comments below, included in the Unitholder’s assessable income. If a Unitholder incurs a net capital loss in a year, this amount is carried forward and is available to offset capital gains derived in subsequent years.

If the Unitholder (being an individual) has held the Stapled Units for 12 months or more at the time of disposal (ignoring the day of acquisition and the day of disposal) and there is a net capital gain, a discount factor of 50% may be available to that individual.

Tax File Numbers and Australian Business Numbers

A Unitholder need not quote a Tax File Number (TFN) when applying for Stapled Units in The Fund. However, if a TFN not quoted, or no appropriate TFN exemption information is provided, tax is required to be deducted from any income distribution entitlement at the highest marginal tax rate plus Medicare levy (currently 47 per cent). Unitholders that hold their Stapled Units as part of their business may quote their Australian Business Number instead of their TFN.

Goods and Services Tax (GST)

The acquisition and/or disposal of Stapled Units is not subject to GST.

Generally, GST incurred on costs relating to the issue, acquisition or disposal of Stapled Units should not be recoverable in full. However, Unitholders are recommended to seek professional taxation advice in relation to their own position.

Stamp Duty

Based on the assets of the Fund at the time of the issue of Stapled Units, no stamp duty should be payable by Unitholders on their acquisition of Stapled Units provided no Unitholder, either alone or together with related entities acquires 20% or more of the Stapled Units. In relation to any subsequent dealing in Stapled Units, the stamp duty implications will depend on the extent of the acquisition, the nature of the Fund and its investments at the relevant time. On this basis, Investors should make their own enquiries about the stamp duty implications of a future dealing in the Fund at the relevant time.

Foreign Account Tax Compliance Act (FATCA)

In compliance with the US income tax rules commonly referred to as the FATCA and the Intergovernmental Agreement signed with the Australian Government in relation to FATCA, The Fund will be required to provide information to the ATO in relation to: • Unitholders who are individuals that are US citizens or tax residents (US persons); • Unitholders which are specified US entities or passive non-financial entities controlled by US persons. The Fund is intending to conduct its appropriate due diligence (as required) to collect information about Unitholders (and their controlling persons as appropriate). The Fund reserves the right not to open an account, where the Unitholders do not provide appropriate information to The Fund.

Common reporting standards (CRS)

The CRS is the single global standard for the collection of financial account information of Unitholders (and their controlling persons, where applicable) and the reporting and exchange of financial account information of certain Unitholders (and their controlling persons, where applicable) who have tax residency of a foreign jurisdiction. The CRS is similar to FATCA, whereby The Fund will need to collect information, including the tax residency of each Unitholder (subject to limited exceptions at the Responsible Entity’s determination), and report to the ATO similar financial account information of certain Unitholders (and their controlling persons, as applicable) who have tax residency of a foreign jurisdiction. The Fund reserves the right not to open an account, where the Unitholders do not provide appropriate information to The Fund. The ATO may exchange this information with the participating foreign tax authorities of those non-residents.

By making an Application for Stapled Units, each prospective Unitholder agrees to provide the required information (related to its and its controlling persons, if applicable, tax residency and related information) requested by the Responsible Entity, on behalf of The Fund, in order to comply with the FATCA and CRS regimes and upon becoming a Unitholder, to update the Responsible Entity promptly if there is any change to this information provided.

NEW ZEALAND Taxation of New Zealand resident investors

A summary of the general New Zealand taxation considerations for New Zealand resident investors (NZ Unitholders) in The Fund is set out below. The categories of NZ Unitholders considered in this summary are limited to New Zealand tax resident individuals, companies (other than life insurance companies), trusts, partnerships and complying superannuation funds.

The summary below is general in nature, is not exhaustive of all New Zealand tax consequences that could apply to any given NZ Unitholder and does not constitute advice. The individual circumstances of each NZ Unitholder may affect the taxation implications of the investment for the NZ Unitholder.

The summary below does not cover potential tax implications for non-New Zealand resident Unitholders, insurance companies, banks, NZ Unitholders that carry on a business of trading in units, NZ Unitholders who are subject to employee share scheme rules or who are exempt from New Zealand tax.

It is recommended that all NZ Unitholders consult their own independent tax advisers regarding the income tax and GST consequences of acquiring, owning and disposing of Stapled Units, having regard to their specific circumstances.

Section 11 Taxation

The summary below is based on the relevant New Zealand tax law in force, established interpretations of that law and understanding of the practice of the relevant tax authority at the time of issue of this PDS.

Tax laws are complex and subject to ongoing change. The tax consequences discussed do not take into account or anticipate any changes in law (by legislation or judicial decision) or any changes in the administrative practice or interpretation by the relevant authorities. If there is a change, including a change having retrospective effect, the income tax and GST consequences should be reconsidered by NZ Unitholders in light of the changes. The precise implications of ownership or disposal of the Stapled Units will depend upon each NZ Unitholder’s specific circumstances.

Income Tax Stapled units in the two stapled Australian unit trusts should be treated as separate assets for New Zealand income tax purposes, being the 360 CEIT units and 360 CEAT units.

For New Zealand tax purposes the two stapled Australian unit trusts that make up the Fund are deemed to be companies. Therefore, NZ Unitholders are treated as holding shares in Australian resident companies.

The summary set out below assumes that NZ Unitholders and their associates do not together hold 10% or more of the total Stapled Units on issue in The Fund.

NZ Unitholders will be taxed on their Stapled Units under one of two regimes: the ordinary tax regime or the Foreign Investment Fund (FIF) regime.

Tax Treatment under the Ordinary Tax Regime NZ Unitholders will be taxed under the ordinary tax rules if the investor is a New Zealand resident natural person and does not hold offshore equities (including units in a unit fund but excluding, amongst other things, shares in certain Australian resident companies listed on the ASX) the total cost of which is more than NZ$50,000 unless the NZ Unitholder elects otherwise. Under the ordinary tax regime: • any distributions will be dividend income for the Unitholder; • withdrawal by redemption of Stapled Units will give rise to dividend income for the Unitholder equal to the difference between: – the redemption proceeds; and – the average issue price of all the Stapled Units multiplied by the number of the Unitholders’ Stapled Units which are redeemed; and

In addition to tax on dividends, a NZ Unitholder will be taxed on any gains from the sale or redemption of Stapled Units only if the NZ Unitholder acquired the Stapled Units either: • for the purpose of disposal; • as part of a profit making scheme or undertaking; or • as part of a business in respect of which the sale of such investments is an ordinary incident.

Amounts taxed as dividends will not be taxed again as gains from sale.

Tax treatment under FIF Regime If a NZ Unitholder holds offshore equities (including units in a unit trust but excluding, amongst other things, shares in certain Australian resident companies listed on the ASX) the total cost of which is more than NZ$50,000, the NZ Unitholder will be taxed under the FIF regime.

Under the FIF regime a NZ Unitholder will generally be deemed to derive taxable income equal to 5% of the market value of the Stapled Units it held at the beginning of the income year (fair dividend rate, or FDR method).

Any profits from selling or redeeming the Stapled Units and any dividends or redemption proceeds received are disregarded (except as described in the following paragraphs).

If a NZ Unitholder buys and later sells Stapled Units in the same income year, the Unitholder may have additional taxable income equal to either: • the actual gain from the Stapled Units both bought and sold during the income year (including any distributions received on those units) (the “actual gain method”). For this purpose, the last Unit acquired is deemed to be the first sold; or • 5% of: – the difference between the greatest number of Stapled Units the Unitholder held at any time during the income year and the number of Stapled Units held at the beginning or end of the year (whichever produces the smaller difference), multiplied by the average cost of all Stapled Units acquired by the Unitholder during the income year (the “peak holding method”).

A NZ Unitholder must apply the method which produces the lesser amount of additional income when applied consistently to all of their FIF interests bought and sold in the same income year.

A slightly different version of this method is used by NZ Unitholders that are managed funds.

If a NZ Unitholder is a natural person or a family trust and its actual realised and unrealised return together with dividends and distributions from their total portfolio of offshore equities (excluding ASX listed Australian resident companies) is lower than the amount calculated under the FDR method described above, then the NZ Unitholder can elect to be taxed on its actual realised and unrealised returns - including dividends and distributions (the comparative value or CV method). If chosen, this method must be applied across all the NZ Unitholder’s FIF interests (excluding ASX listed Australian resident companies).

It is noted that the application by a NZ Unitholder of a certain method for calculating taxable income under the FIF regime in respect of Stapled Units held in The Fund may have implications for other investments that the Unitholder holds that are also subject to the FIF regime.

A NZ Unitholder may also need to make certain elections in respect of how amounts are converted to New Zealand dollars.

The FIF regime described above is subject to various exceptions - and there are various restrictions as to the availability of methods for calculating income from FIF interests. Unitholders should seek specific tax advice if they believe the FIF regime may apply to them.

New Zealand GST The issue and redemption of Stapled Units in The Fund will not be subject to New Zealand GST.