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On closer examination I should clarify that the $5 redemption appears to have been suggested as a way to defeat creditors in the event of a lawsuit. Otherwise redemption at the purchase price of the units appears to be the norm. This still begs the question - how is it commercially...

With regards to the application of Part IVA - I've said above, several times, that the ATO should have no problem with Phase 1 of the operation, the borrowing to invest part. They will obviously have no issue at Phase 2 (sale) IF the CGT is paid by the investor who claimed all the tax...

Some of these points have been covered earlier but for the benefit of those who are just skimming through it is worth repeating: 1. I have never said that the interest on the borrowings in not tax-deductible. It is a fundamental principle of tax law that if you borrow to make a GENUINE...

Dale, thanks. You're a scholar and a gentleman! Your comments about managed funds are not quite correct. With a managed fund not only does the investor receive income but also constantly benefits from a revaluation of the units, reflecting the increase in capital value (shown daily). I'm...

A sincere thank you to all those adding quality to the discussion. As there is no legal precedent or definitive ATO Rulings, ultimately views are likley to remain divergent. coastymike uses the analogy of a business run through a discretionary trust and then having CGT on its sale being...

Many thanks for those contacts coastymike. Yes, the most artificial part of the structure is the cost of the income units vis-a-vis the anticipated gain. As a benchmark (continuing with the 500k example and sticking with fixed income units) this amount invested in a bank at current fixed...

Rolf, no hidden agenda. Just looking for clear answers. My response to JamesGG was in keeping with the dismissive nature of his post. He was dismissive without specifically addressing the clear shortcomings of the scheme. No offence intended to any party...

JamesGG, thanks for the detailed reply which unfortunately perfectly fits the bill of an ardent promoter of the scheme: 1. So, the promoters such as yourself are the only ones who 'understand' the scheme? This kind of arrogance is not necessary. Quite frankly the scheme itself is not that...

I have just subscribed to this forum after reading some very interesting threads and posts. There are certainly many knowledgeable people out there. I was on the verge of setting up a HDT and have decided against it for reasons which will follow below. The threads dealing with this clearly...