I'm not sure if either of us has a handle of DCl 's funding of the unit holder who wants DCL to rent a flat to his daughter. ( according to the NEWDAILY article by Rod Myer, 1st June 2017).
My take ( if correct) is that each sub fund will be treated by the ATO on a individual basis, so I don't believe DCl will obtain a widely held blanket precedent as each will be assessed case by case.
Any individual investor who puts a related party (ie daughter) into a sub fund property who holds a significant interest in that sub fund is probably unlikely to get any joy from the ATO, imo.
Given each fund has life of 5 years and then wound up, I am not sure what the point of funding this third party action is. Even if the majority of unit holders agreed to take out the minority at the 5yr expiry and extend the trust, then I would expect the surviving unit holders would be a related party to the tenant ( in this case the daughter) and therefore rendering that individual investors interest non compliant. The NEWDAILY article quotes Helen Hodgson , Law Professor from Curtain University , who thinks that someone would likely soon want the loophole closed.
So I go back to my earlier questions:
Why is DCL funding this action, Where is the money coming from and why have they not made a proper disclosure to the market that reveals the detail behind this.
If you have haven't already read the NEWDAILY article by Rod Myer of 1st June 2017, its probably worth a look. The story is headed DomaCom test case: Super for housing is back on the agenda.
Cheers
DCL Price at posting:
15.0¢ Sentiment: Sell Disclosure: Not Held
(20min delay)
