Owning shares through a trust structure, page-30

Here's a curly one. My SMSF has a sort of altruistic interest in a USA LLC partnership with ability to recognise objects to assist blind folk. Last year it had a small income which was compulsorily passed through to the partners in the partnership books, but the tax owing was deducted by the LLC & passed on to the IRS at 40%. The SMSF is in full pension phase, so exempt in OZ, but some of you will probably know that ATO does not refund non- OZ tax at this stage of a SMSF, so I have approached a US accountant to register the SMSF for IRS tax, hoping to get some back from the IRS. So far he has registered it as a Foreign Trust &, as trustee, I can't yet see how that will regain some US tax. My bigger concern is that other US partners wish to seek a trade sale on any further success, creating US CGT. Sure, I didn't do my homework on this whole issue, but it may be a warning to any other SMSF trustees about investing in foreign un-listed entities, or even listed ones when in full pension phase. Part of the problem is the non-recognition of Super Funds in the AU/US taxation treaty. Pollies are not committed to fixing it. Funny, because I suspect a lot of funds are doubtful about investing in USA.