HDT's - ATO Notice of Objection Decision

You might want to look into a recent case involving the ATO and Andrew Forrest regarding his investment in the Minderoo Trust.
The taxpayer had borrowed to purchase units in a Hybrid Trust. The ATO disputed the interest deduction. The Full Federal Court decided that Forrest was entitled to a deduction on the full amount of interest. Eventually the ATO accepted the decision of the court and decided not to appeal.
This case highlights the importance of having your trust deed prepared properly.
Might be worth chatting to your Accountant about this one.

In that case the ATO went for complete denial of deductions.

The issue of whether apportionment was appropriate was not submitted by the ATO ... unfortunately.