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Hi there Sharon, Welcome to Somersoft! Good to have another accountant on board, and presumably another supporter of the HDT...? Do you use MGS deeds and do you have any thoughts on calculating redemption price of special income units? Do you have any thoughts on the PIT? GSJ

Me too?! GSJ

I thought the ATO will tell you in advance if your PBR is likely to be successful, why couldn't you just ask them? GSJ

Mry, What about making it for an interest only loan? Will that help the case or hinder it? It will become positively geared sooner wouldn't it, and many investors would do this anyway as it makes more commercial sense? GSJ

Mry, do you also feel that the 'arm's length' thing is an issue? GSJ

Just a random thought...could it make sense for the trustee to charge a 'redemption fee' to the unitholder when units are redeemed...Maybe a high fee for early redemption given that the underlying asset, ie. property, is a relatively illiquid investment? GSJ

I think Julia refers to the CGT on unit redemption. If you bought the IP in a DT to begin with you would not have to pay this redemption CGT, although on the other hand, you wouldn't have been able to negative gear either. I think HDT users would aim to minimise this CGT on unit redemption by...

Excuse my ignorance (not meaning to be rude here), but are these areas part of an accountant's area of expertise, or more that of a solicitor or financial planner or 'asset protection specialist'??? GSJ

If you could be persuaded or convinced that there is an explanation for this that does make commercial and financial sense... Would you then argue that it is not 'arms-length' as Alex mentioned previously? GSJ

Can't help but laugh at the title of this thread 'HDT explanation for Dummies'...and the 6 confusing and contradictory pages that have come out of this thread so far! Sorry 'dummies' :D . Personally, my 'gut feeling' now is that we are making this HDT thing far more complicated than it actually...

Thanks Ebbie, very interesting. Mry, With 66298, all the accountant had to do was say that the investment will become positively geared at some time in the future...isn't it??? Seems pretty foolish to tell the tax office that it would never become positively geared?! Negatively geared...

Mate you are hilarious :D ! GSJ

Thanks Shadow, interesting stuff. GSJ

And you can't use the PIT for shares or anything else right? And also, you have to always use C&N for your accounting as they have some trademark on it right? Putting the 80 year thing aside (do you really care what happens after 80 years?), it seems more disadvantageous than a straight HDT...

Hi Shadow, Just curious, from your research, what else do you think makes the PIT better than a HDT? My understanding was that the PIT allowed discretionary distribution of rental income to lower taxed beneficiaries before you became positively geared and while SIU's were on issue...this...

Thanks Alex, I see what you're saying re. 'arms length' transactions... Another thing that makes sense about it though is that if you redeem SIU's at a time before the investment runs its course and the property is sold by the trustee, it may be justifiable to have a low redemption price for...

For some unlisted commercial property trusts they have a facility where you can have a limited level of liquidity and you can have your units redeemed before the end of the fixed-term investment period. In these cases how do they calculate the redemption price of the units??? GSJ

If people invest as unit-holders in LPT's for commercial property, and they are negatively geared, then sell out of their LPT's for whatever reason, they may only make a small capital gain, or none at all...I'm sure this happens a lot, and if this is OK with the ATO, then isn't negative gearing...

Mry, Given what James says above, there doesn't seem much point in getting a PBR. Also, have you or Julia not seen the MGS trust deed yet? GSJ

But with the HDT isn't the aim to try and get redemption at market value of the special income units (SIU's), NOT, the actual underlying property. So if you don't redeem SIU's at cost, you redeem at a price just slightly higher than cost, that you work out on some rational basis - but this is...