Loan between trusts

I have a number of trusts all with the same corporate trustee of which I am the sole director. Each trust is a fixed unit trust and holds IP's and is done purely for land tax reasons not asset protection.

One property in a trust of its own is severely cashflow negative as it is a development site. Other trusts have an ongoing cash surplus.

Can a trustee loan money between trusts on a commercial basis with interest charged? The trust deeds allow borrowing/lending of funds.

Will ask the accountant but thought I would ask here too

Thanks
Dave
 
You will have to look at the deed but there is nothing tonstop one trustee lending to another trustee unless the deed prohibits it.


But in your case if the trustees are the same it will be impossible to lend as a person cannot contract with itself.

A way around this maybe an intermediary entity. A lends to B with B lending to A. Seek legal advice
 
But in your case if the trustees are the same it will be impossible to lend as a person cannot contract with itself.

Whilst there might be a general law issue, at tax law there is no mutuality because the entity is acting in different capacities with respect to each trust.

The main problem for tax is the trust loss recoupment rules.
 
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