excess distributable income is derived from a duration mismatch between the life of the asset, and the life of the financing associated with it. In an increasing interest rate environment, not only do the attractiveness of trust distributions decrease, but quite possibly, the distributions themselves decrease, leading to a double whammy of both declining yield and substantial loss of unitholder value. Sacrifice of growth unless more equity is issued: because most income is passed on to unitholders, rather than reinvested in the business. In some cases a trust can become a wasting asset. Because many income trusts pay out more than their net income, the shareholder equity (capital) may decline over time. For example, according to one recent report, 75% of the 50 largest business trusts in Canada pay out more than they earn. () However a PriceWaterhouseCoopers study indicated that contrary to opinions expressed elsewhere, Income Trusts were efficient at reinvestment in their businesses and added significant value for their unitholders. Exposure to regulatory changes: to the extent that the value of the trust is driven by the deferral or reduction of tax, any change in government tax regulations to remove the benefit will reduce the value of the trusts. See Canadian income trusts below on how changes in Canadian taxation rules diminished market values. See also Flow-through entity Income fund Investment trust Real estate investment trust Royalty trust References External links Canadian Association of Income Trust Investors Tax and Other Issues Related to Publicly Listed Flow-Through Entities from the Canadian Department of Finance Canadian Income Trusts - The price of higher current yield Distribution requirements of the Ontario Securities Commission, including a section on income trusts and other indirect offerings CAITI-ONLINE Current commentary on Canadian Income Trust issues. Income Trust Centre from The Globe and Mail InvestCom section on Canadian income trusts Canadian Income Trusts List iTrust Institute Forum Magazine from Advocis, the Financial Advisors Association of Canada Canadian Association of Income Funds CAITI-ONLINE-MEDIA Compilation of past print and video ads from CAITI Coalition of Canadian Energy Trusts Income Trusts and Tax Leakage: Is there a problem? by Yves Fortin Income Trust Report by PricewaterhouseCooper Corporate finance Types of business entity Legal entities Taxation in Canada Financial history of Canada