Taxpayers Alert for Hybrid Turst
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Read taxpayers Alert from ATO Was wondering if related to PIT trust (Hybrid Trust) with Units and Discretionary The Alert fromATO is as follows:
B]Taxpayer Alert TA 2008/3[/b] describes
a non-arm’s length arrangement under
which taxpayers use borrowed funds
to acquire an interest, such as units, in
a certain type of trust, which uses the
funds to purchase income-producing
property. The Tax Office says the
arrangement seeks to provide income
tax deductions to the taxpayers for all
of their interest payments and other
borrowing costs. The Tax Office view is
that the arrangement does not provide
a sufficient connection between the
expenditure and the production of
future income and/or capital gains,
which may be distributed to other
beneficiaries of the trust, who may have
a lower tax rate.
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Read taxpayers Alert from ATO Was wondering if related to PIT trust (Hybrid Trust) with Units and Discretionary The Alert fromATO is as follows:
B]Taxpayer Alert TA 2008/3[/b] describes
a non-arm’s length arrangement under
which taxpayers use borrowed funds
to acquire an interest, such as units, in
a certain type of trust, which uses the
funds to purchase income-producing
property. The Tax Office says the
arrangement seeks to provide income
tax deductions to the taxpayers for all
of their interest payments and other
borrowing costs. The Tax Office view is
that the arrangement does not provide
a sufficient connection between the
expenditure and the production of
future income and/or capital gains,
which may be distributed to other
beneficiaries of the trust, who may have
a lower tax rate.
