An article on the website Professional Planner talks about a new legislation which deals with the limited recourse borrowing arrangement (LRBA). While the bare trustees are involved in the acquisition of assets through LRBA, the ATO feels that what is being referred to as a bare trust can be a holding trust in actuality.
There are certain tax issues that could arise out of the present imbroglio. These include, but may not be restricted to, 1) whether the holding/bare trust requires filing a separate IT return 2) whether first party can claim interest deductions 3) CGT events of the nature E2 and E5 and 4) issues pertaining to franking credits.
You can read the original article here.
