I have a friend with some large capital losses. They are basically wasting away as she will have no capital gains to offset against for a long time. So this has gotten me thinking.
What if someone had some large capital gains for property held via a trust. They could distribute these gains to the person with the loss. But they are not related and cannot be classed as a beneficiary. If the trust deed was amended to include the new beneficiary, it could trigger a CGT event. So what if a new trust were formed with both parties as trustees and beneficiaries.
The Capital gain could then be distributed to the new trust and the trustees of the new trust could then distribute the capital gain to the person with the loss.
Do you think this strategy would work?
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Originally posted by Terryw:So what if a new trust were formed with both parties as trustees and beneficiaries. The Capital gain could then be distributed to the new trust
This sounds back-to-front to me. You want to make the original trust (the one with the gains) a beneficiary of the new trust to avoid resettlement problems, but how does that allow you to distribute the gains? Gains are distributed TO beneficiaries, not FROM them.
And if it was the other way around, with the new trust being a beneficiary of the original trust, then I think it would cause the same resettlement problems as adding the individual directly.
This is of course just an observation and not intended as advice etc. etc.
GP
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