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  • Profile photo of Blue_TobaBlue_Toba
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    @blue_toba
    Join Date: 2001
    Post Count: 3
    May 25, 2005 - 1:22 pm

    Thanks to those who replied.

    There is one point I’d like to raise, which is based on the latest WealthGuardian 2005 (page 77). It says “…there are some key advantages to using a hybrid trust so that tax losses can flow through to beneficiaries rather than remain locked inside the trust structure”. Unfortunately, no explanation was given.

    This appears to be different to the common belief. Does anyone have any comment.

    Cheers!

    Profile photo of Blue_TobaBlue_Toba
    Participant
    @blue_toba
    Join Date: 2001
    Post Count: 3
    May 24, 2005 - 2:04 pm

    Thanks Terryw!

    1. In relation to distribution of income, I can understand that for the purpose of claiming deduction on interest of the loan you must have used that loan for income producing purposes. However, in light of HDT is it still possible to distribute some income to other benefeciaries other than the member who borrows from the bank? Can anyone comment on that?

    2. On buying a brand new property, where the building depreciations and deductions are large in the first years and say outstripping the rental income. The trust will end up with a loss (even without interest payments). Can you still pass on this loss to the person who took the loan as further tax deductions? or must this loss be rolled over to the following years?

    3. Where the loan in interest only loan; and say the answer to Question 1 is that the rental income must be 100% be offloaded to the person who took the loan for it to be a genuine tax deduction. Many many years later when the property genuinely becomes positive gearing as rental income increases, how can you distribute the income to other beneficiaries whilst still claiming tax deductions on interest only loan repayments?

    Thanks

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