BABCOCK & BROWN

9 November 2005
The Directors
Babcock & Brown Limited
Level 39
Chifley Tower
2 Chifley Square
SYDNEY NSW 2000
Dear Directors
Babcock & Brown Subordinated Notes (BBSN)
Taxation implications for Holders
We have been requested by Babcock & Brown Limited (Babcock & Brown) to prepare a
taxation report for inclusion in the prospectus dated 9 November 2005 (Prospectus) in relation to
the issue of BBSN.
The information contained in this report is of a general nature only. It does not constitute tax
advice and should not be relied upon as such. This report outlines the general Australian taxation
implications for Australian residents and non-Australian residents who successfully subscribe for
BBSN (each a Holder and non-resident Holder respectively) and who hold BBSN on capital
account. We have not addressed the tax treatment for Holders and non-resident Holders who hold
BBSN on revenue account or as trading stock.
As the tax consequences to Holders will depend on their own facts, Holders should seek
independent advice in relation to their particular circumstances.
This report is based on the Australian income tax law in force and the practices of the Australian
Taxation Office (ATO) applicable as at the date of this letter. Unless otherwise indicated,
references to legislative provisions are to the Income Tax Assessment Act 1936 (Cth).
We are not licensed to provide financial product advice under the Corporations Act 2001 (Cth).
Taxation is only one of the matters that must be considered when making a decision on a financial
product. Any investor should, before acting on this material, consider taking advice from a person
who is licensed to provide financial product advice under the Corporations Act 2001 (Cth).
Capitalised terms not elsewhere defined refer to terms in the Prospectus. All references to the Issuer
are to Babcock & Brown.
1 Australian residents
1.1 Treatment of Interest Payments on the BBSN
Interest Payments on the BBSN will constitute assessable income to Holders.
Broadly speaking, Holders will be assessable on an Interest Payment in the income year in which it
is received.
MLC Centre Martin Place Sydney NSW 2000 Australia Telephone +61 2 9225 5955 Facsimile +61 2 9221 6516
GPO Box 4982 Sydney NSW 1044 Australia www.gf.com.au
Offices in SYDNEY MELBOURNE Greenwoods & Freehills Pty Limited ABN 60 003 146 852
Liability limited by a scheme approved under Professional Standards Legislation
BABCOCK & BROWN SUBORDINATED NOTES 61