Hybrid Trusts or in my own name?

ok thanks 2 notes to take away,

1) children automatically become beneficiaries (does a spouse also?)

2) if i'm claiming interest i can't distribute funds to anyone by mylself

Depends on the wording of the deed. Children generally would automatically become beneficiaries but only if the wording is right. Spouse may too - but what is the definition in the deed, would a defacto be classed as a spouse.

2) Under tax law a unit holder couldn't claim interest to buy the units unless they were entitled to both income and capital of the trust. Otherwise it would make no commercial sense to invest in the units. This is the same with this socalled PIT trust.
see Taxation Determination TD 2009/17
 
Thanks Terry i read this part of your ebook (which is great by the way!)

can i go from mode where i am claiming on the interest for the units, then issue unit to a beneficiary later down the track.


i my laymans terms for me to understand, i would say could i negative gear for 5 years, then when its cash flow positive, add others to the trust (issue units to other beneficiaries)?
 
Thanks Terry i read this part of your ebook (which is great by the way!)

can i go from mode where i am claiming on the interest for the units, then issue unit to a beneficiary later down the track.


i my laymans terms for me to understand, i would say could i negative gear for 5 years, then when its cash flow positive, add others to the trust (issue units to other beneficiaries)?

The idea is the trustee would redeem the units and then start distributing the income of the trust to the discretionary beneficiaries. But there are CGT and stamp duty issues with redemption of units.
 
When you go HT you are limiting yourself to St George, CBA, Suncorp and NAB.

St George and Suncorp are probably the best when it comes to HT's, haven't tested CBA yet as its a new change in their policy and our few experiences with NAB have been terrible.

Hi Shahin

How about Westpac & RAMS
 
RAMS used to be fine with all sorts of trusts, but my knowledge on that is pre-GFC and RAMS is nothing like it was then (which is both good and bad) :)

Westpac is problematic on any type of trust in my experience. You can probably get them to accept a HDT if you speak with the right people, but there's plenty of easier ways to finance them IMO.
 
As a tax practitioner well versed in HDT I need to ask why you would be using one ??

There are better solutions than taking risks with a hybrid. Simple issue is that a hybrid trust taints the property and doesn't allow another party to acquire some of all interest without some concerns - CGT and thus stamp duty ?? Then there can be land tax issues.

Adding others to the trust later when its positive geared fails the Commissioners views in the tax ruling... Its a Part IVA scheme. You do know about the ruling and know what it means ?? Any deed which permits that fails now...Not just later. You already have a problem or haven't read the deed. If the deed allows this then it may not comply with the ruling.
 
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