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By "dissipate" I meant to dispose, apportion or appropriate trust property to others so as to reduce any proprietary interest of the unit holder. Any ability of the trustee to reduce the unit holders interest (as defined under the deed) by disposing or apportioning to others for less than...

Hi Chris, Again, I haven't read your deed. However, the ATO letter suggests there is nothing to stop the trustee from dissipating the unit holder's corpus and hence reducing the market value of that interest. Maybe that is why they are reluctant to apply the market value substitution...

Thanks very much for your time Chris. What I had taken as settled law or practice was probably more a reflection of ATO broad publications plus some commentators who were pushing a blanket opinion instead of looking at specific circumstances. It will take some time to think about, however...

Thanks Chris, Still a query as to the definition of 'special income'. The edited ruling states: "... will be the amount that is attributable to the investment by the trustee of the moneys received by it from the issue of Special Income Units. " That still seems a bit vague...

Absolutely true Chris. I never considered the HDT as an optimum structure for property acquisition, although it might niche into some special requirements. However, your previous post about refinancing via borrowing full market value has added a variable that I did not previously consider...

Hi Chris, This might be just an academic point if nobody is prepared to litigate, however I am just postulating the reasoning that a court may take. It's priority is not to maintain the revenue but to apply the law. There is ample trust and revenue law to show that a person who is...

Back to issue, streaming & redemption. If a unit only carried rights to taxable income, I guess that the market value is lower due to the diminished rights. Therefore, redemption at market value does not mean an effective double taxation given that the proceeds are not the classical 'net...

I find it rather amusing that the only state in Australia has been chosen that expressly removes the power of the court to vary a deed for the purpose of a tax advantage. s.59C(3)(a) Trustee Act 1936 Cheers, Rob

Hi Chris, Yes I was using the context of the mum & dad HDT holding passive assets. However, even if a special income unit was merely something akin to a right to an income stream then it would still have a present value, also affected by the right to call for a redemption. I am...

If the bankrupt beneficially held all the units on issue then the argument by a trustee that it must act in the best interests of the beneficiaries as a whole by delaying for a better price is somewhat undermined. Cheers, Rob

Hi Chris, Sorry to harp on about the 'returnable amount', however this is a term created by the ATO and it is couched in more traditional unit trust examples as you pointed out. Paragraph 5(c) defines this as 'represents money or property previously transferred by a beneficiary .... to the...

Hi Terry, It is unlikely the entire $1m (being the market value of the units) would be a 'returnable amount'. Examples of a 'returnable amount' from case law on partnership are contributed capital and un-withdrawn attributed net income that has been 'reinvested' for income producing...