If this is correct, then I think you would lose the benefit of the CGT discount when you sell CIP as CIP Holding company is not entitled to the discount.
I'm probably missing something.
SYD
Yeah, and?
With all due respect I suggest reading the many discussions on the forum re asset protection.
The whole setup was about making interest tax deductable.Can someone elaborate on the DT/UT structure?
Is this having a Unit Trust as a unitholder in a Discretionary Trust, with the property actually owned by the Discretionary trust??
Or the other way round?
What is the advantage of this?
I recall Chris Batten talking about a UT/DT structure for RIPs to allow transfer into a SMSF?
But you lose protection, and the ATO don't like it when you want it both ways and when playing funny buggers with units & redemptions.
The concept is that Person borrows from the bank to buy/invest units of a trust (HDT) and that makes the interest tax deductable.
The first unit trust (HDT) then buys units in another trust (UT) witch then buys/owns the RE.
UT
↑
HDT ← trustee
↑
Investor
The idea is that SMSF can also buy units (inject capital) in the UT and thus increase buying power.
Note that this was more useful when SMSFs could'nt borrow money as they now can.
and ftr
http://www.smh.com.au/news/Business...heme-court-told/2005/05/12/1115843314663.html
"Mr Batten told the meeting that the previous year he had earned $1.2 million a month in fees for his tax schemes"
These "trust" thingies are darn good biz for the go get'em hotshot lawyer... I'm gonna signup tomorrow!