Search results

HI Francesco MRY is right. Rob Balanda is talking about a different type of trust to the one that we use and recommend. I have some concerns about Rob's treatment of CG being different to income.....However, he must have done his own research and come to his own conclusions to do it this...

Hey GP No, the redemption does not create any taxable CG or Capital Loss, at all for the trust. Dale

Hi Please do not do anything rash or hasty. There are way too many issues involved to make this as simple as some things..... For example: The redemption of units in a HDT is not all that common. Yes, it does happen, but, not very often. The sale of any IP will always trigger a CGT...

Hi The redemption of units does not create a capital gains event for the trust, at all. It does, however, seem to create a capital gains event for the individual just as when an individual invests in units in a managed fund. Dale

Hi Ebbie Yes, I do think that is reasonable. Dale

Hi Norm Being a simple person, I ahve to break everything down into bite sized chunks to manage.... So, the trust issuing $72,000 worth of SIU's is common and not an issue. The trust using the money raised through issuing the SIU's to pay out a trust loan is common and should not be a...

Hi No, not really. A secretary or a factory worker with one IP may not have any real asset protection concerns. An investor with multiple IP's could argue a different line as could a professional whose chances of being sued increase every year. At the end of the day, the choice of...

Hi Yes, you are doing well. If the trust deed provides discretion in distributing income that should go to the unit holder then the ATO and the courts will rightly say that no tax deduction is allowed for the interest paid by the unit holder on the loan used to buy the units. If the deed...

Hi As a way of demonstrating how the ATO appears to think about the HDT and the issue of income/capital, here is a copy of a Private Binding Ruling that makes very interesting reading..... 66298 Edited version of private ruling Authorisation Number 66298 This ruling is a...

Hi I believe that the discretion to distribute income to beneficiaries other than the unit holders will create a legal problem with the "entitlement" to income and this is usually enough to deny tax deductions for the interest incurred by an individual. Be careful with this structure. Dale

Hi Let's say that a HDT has two classes of income: rent from an IP that was financed by issuing SIU's; and managed fund income with no SIU's issued the net rent must be distributed to the SIU holder the net managed fund income can be distributed at the discretion of the trustee...

HI Our office policy is a reasonably conservative one..... if there are units on issue then the trust income (including any CG) MUST be distributed to the unit holders. I am sorry if I have given you the impression that this is not the case. Dale

Hi GP Yes, it is entirely possible that the market value of the SIU's is exactly the same as was paid for them. Thus, the CG made on the redemption of the SIU's may well be NIL. It will depend upon: your trust deed your accountant's understanding the tax law at the time of the...

Hi GP The interesting thing about all this is that we (Batten, Vale, NickM, Coasty Mike, Mry and myself) are all working from our own interpretations of the HDT and how it works. None of us have the ability to say with absolute certainthat this is how the ATO thinks and more importantly...

Hi Alex Absolutely yes. The tax office main concern is that the individual borrows money and receives a very poor ROI with no right to the CG made if and when the trust sells its assets. Mind you, I think their view is a little short sighted, too. So, ensuring that the trust does...

Hi I suppose the thing to remember here is that the trust deeds used by Vale are different to the Batten deeds used byNickM, Coasty Mike and myself. This will mean that the inocme could be properly treated differently in each. After dealing with the tax office earlier this year with...

Hi Alex Yes, that is my understanding and belief. Dale

Hi Alex Yes, that makes good sense and is our basic understanding, too. However, we are also aware that differing trust deeds will have differing rules for profit distribution. Dale

Hi Naturally, I am biased. I use a HDT for my own investing and recommend them in my practice and so therefore please take my comments with a grain of salt. The basic reason why I think the HDT is OK at law is: the structure is a common enough structure used for owning assets the...