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With all due respect (to Dale and others) the ATO can throw wild punches from the least-expected quarters. The ATO can be political and change its policies at, for all I know, the whim of the Commissioner. Who expected them to basically shut down a large part of the the primary producer tax...

That's another unresolved issue. If the trustee redeems the units at FV: 1) Will the ATO deem the units to have been redeemed at market value, making the individual liable to tax, and 2) How will the courts look at the value of the units in the case of a bankruptcy proceeding? Alex

But if you write the deed so that the unit holder has a claimable right to CG, aren't you also destroying the asset protection benefits? i.e. if I hold units that have a legal right to both income and capital (as opposed to where CG distribution is discretionary) then if someone sues me...

Putting something in a trust IS for asset protection. If you write the deed such that capital growth of an asset can be distributed in a discretionary way, that means your creditors can't get at it if they sue you personally because you have no claim to the CG. Alex

I see. The usual idea of 'just because we've never explicitly considered this against the rules in the past doesn't mean previous returns lodged were legit'. I'm sure people will challenge this in court, though? Alex

Actually it's not unrealistic. 4% yield (not uncommon, esp in Sydney), less agents fees, council rates, insurance, etc and DEPRECIATION (here it works against you) and it may very well be only a 2.5% net yield. Yields on commercial are usually higher (especially as many leases state that tenant...

Ouch. I still need to read the judgement in detail but the first page seems pretty clear. Are these rulings retrospective? i.e. how does it affect past tax returns done for HDTs and individuals who deducted the full amount of interest? Alex