CGT on Hybrid Trusts

Hi guys,

Was hoping someone could maybe offer some advice regarding capital gains on hybrid trusts.

We’re in the process of making some substantial changes with our accountant, surrounding asset protection, thus my dilemna. I havent run this past him yet, as I can expect a 2 hour deliberation with a high price-tag attached.

My understanding of hybrid trusts, is being a mix of discretionary and unit, the trust can acquire assets and the trustee can purchase shares in the trust. If this is the case, Im looking to purchase an IP (in the trust’s name) with us personally borrowing as trustees – our justification for deductibility would be against the “value” of the units.

However, my question is: If we sell the property with a capital gain, the trust would incur a CG on the gain, which I believe still is entitled to the 50% deduction over 12 months as per individuals, but would the units that we personally hold, also incur this CG?

Any feedback / suggestions are more than welcome and all tax disclaimers to replies will be honoured!

Rob
[xmas]

Rob Whyte
Certified Mortgage Consultant MIAA

Principal & Licensee
The Mortgage Gallery
e [email protected]

Winner 2004 National Office of the Year!

Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!