INVESTING
A new impending investing vehicle
SMSFs will soon have access to a new structure for collective investments. Michael Hallinan details how these structures will operate.
MICHAEL HALLINAN is self-managed superannuation executive consultant at SuperCentral.
42 selfmanagedsuper
A new company-based structure will soon be available to undertake collective investment. Currently most collective investment structures are trust-based structures, such as unit trusts. While the new company-based structure, called corporate collective investment vehicles (CCIV), will have the same taxation treatment that currently applies to attribution managed investment schemes, it may have significant non-taxation features over trust-based structures as well. The first noticeable feature is the companybased structure may have a far greater recognition and familiarity with foreign investors who are the intended consumers for an Australian cross-border funds management industry. The second feature is that a company-based structure may provide a solution, if not a far better solution, to the problem
regarding the difficulty of terminating uneconomic (managed) investment products. The deadweight cost to the funds management industry of having to maintain subscale investment products should not be underestimated, resulting from regulatory costs and, in particular, the IT costs associated with maintaining systems for subscale investment products. While listed investment companies are a type of company-based investment structure, CCIVs will have greater flexibility in that they can be open ended or closed, they can be wholesale or retail, listed or unlisted, they can offer multiple investment products while having the same investor protections as currently apply to managed investment structures and have a flow-through tax treatment.
