Accessing a lower minimum distribution rAccessing a lower minimum distribution rate for a financial year

Accessing a lower minimum distribution rate for a financial year

19.7. Upon application, in the *approved form, the Commissioner may reduce (but not to zero) the minimum annual distribution rate for a fund for a *financial year. The reduction may be subject to any conditions the Commissioner thinks fit.

19.7.1. Recognising the purpose and object of the fund, the Commissioner must only reduce the minimum annual distribution rate if the Commissioner is satisfied that there are circumstances that warrant the Commissioner reducing the rate.

19.7.2. The Commissioner may reduce the minimum annual distribution rate at any time, including after the relevant financial year has finished.

19.7.3. In determining whether to reduce the rate and what the reduced rate should be, the Commissioner must have regard to:

• the general market conditions in Australia; and

• the past, current and expected levels of returns from the fund’s investments; and

• the long-term impact on the assets of the fund from not reducing the rate for a *financial year; and

• the level of distributions made by the fund in previous financial years; and

• the investment strategy and distribution strategy of the fund; and

• the size of the fund; and

• the compliance history of the fund and the trustee; and

• the fees and expenses of the fund; and

• the terms and other circumstances relating to any gift to the fund under a will; and

• any other matter the Commissioner considers relevant.

Note: Having regard to the general market conditions in Australia, could include reviewing the Reserve Bank of Australia’s target for the cash rate (which is the overnight money market interest rate), the *base interest rate, current returns of other ancillary funds, and the performance of *approved stock exchanges. It could also include examining changes in conditions over time.