Now hang on a minute. What MGS put out is a statement that in their opinion their deed will not be caught by the ATO. Ed Chan put out a similar statement about the PIT and added that providing his clients use it correctly.
MGS are not saying the ATO has approved their deeds or given them a ruling they are just saying their deed doesn't have any of the elements listed in TA 2008/3. Mind you in making that statement they seem to be saying (it is not quiet clear so I could be wrong) that if their deed says redeemed at value then that really means redeemed at market value and it is ok that their deed gives the trustee the right accumulate income because, if units are on issue, that is only in respect of the remainder of the income. This last bit is a bit confusing if the unit holders must get the same return as they would if they owned the investment directly.
It also states that "Abusive Hybrid Discretionary Trust may be those that purport to allow a geared unitholder to claim deductions for interest expenses incurred on loans to acquire units, but where the unit holder receives distributions of something less than what they would have if they'd invested in an asset directly
How many people thought that by having a HDT they would in someway pay less income tax than if they purchased the asset directly? And if not why did you enter into the HDT arrangement?
Sorry but I don't find the statement by MGS reassuring at all. Why haven't they got an ATO ruling to rely on?
MGS are not saying the ATO has approved their deeds or given them a ruling they are just saying their deed doesn't have any of the elements listed in TA 2008/3. Mind you in making that statement they seem to be saying (it is not quiet clear so I could be wrong) that if their deed says redeemed at value then that really means redeemed at market value and it is ok that their deed gives the trustee the right accumulate income because, if units are on issue, that is only in respect of the remainder of the income. This last bit is a bit confusing if the unit holders must get the same return as they would if they owned the investment directly.
It also states that "Abusive Hybrid Discretionary Trust may be those that purport to allow a geared unitholder to claim deductions for interest expenses incurred on loans to acquire units, but where the unit holder receives distributions of something less than what they would have if they'd invested in an asset directly
How many people thought that by having a HDT they would in someway pay less income tax than if they purchased the asset directly? And if not why did you enter into the HDT arrangement?
Sorry but I don't find the statement by MGS reassuring at all. Why haven't they got an ATO ruling to rely on?