Selling IP in hybrid trust - offset expenses from capital gains?

[rodimus]

I have a rental property in my hybrid trust.

The trustee company/trust has accumulated a loss (expenses from loan, car, ebay business, body corporate, council rates) over the past 6 years.

I was told by my accountant that if I sell the property and make a capital gain, that capital gain can be reduced by deducting the loss carried over from previous years.

Is that true?
I thought Capital gain can only be offset by capital loss?

 

[Terry_w]

I have a rental property in my hybrid trust.

The trustee company/trust has accumulated a loss (expenses from loan, car, ebay business, body corporate, council rates) over the past 6 years.

I was told by my accountant that if I sell the property and make a capital gain, that capital gain can be reduced by deducting the loss carried over from previous years.

Is that true?
I thought Capital gain can only be offset by capital loss?

Depends on the circumstances.

 

[Paul@PFI]

Subject to Trust loss tests, Non Commercial loss rules etc

However yes if the trust has a eligible c/fwd loss it firstly reduces any capital gain prior to determining the taxable value of any gain and eventually determining the net trust income eligible to be distributed to special unitholders and/or discretionary beneficiaries. Its actually not optional. Losses must be used as soon as possible.

CGT losses can only be used to offset a cap gain. The inverse is not true.

Watch how you distribute the gain in a hybrid. Its often an exception to the "read the deed rule".