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Hybrid Trust

Discussion in 'Accounting, Tax & Legal' started by Chomp, 19th Feb, 2008.

  1. Chomp

    Chomp Well-Known Member

    Joined:
    12th Jul, 2007
    Posts:
    61
    Location:
    wa
    Can anybody tell me;

    If I sell my ppor to a hybrid trust and then I decide to rent a house somewhere else for myself.

    Would I be able to claim the rent I pay as an expense? and how much?

    or

    Would anyone have a good link showing me the benefits of a HDT in this situation?

    I am pretty sure this would have been covered before so I do apologise but this computer is so slow, searching is taking for ages!
     
  2. tonyused

    tonyused Active Member

    Joined:
    9th Jan, 2008
    Posts:
    32
    Location:
    Perth, Western Australia
    I would think twice about what you want to do.

    Ask yourself - what am I trying to accomplish? To get a tax deduction for the interest on the morgaged PPOR? as against stamp duty costs & loss of CGT exemption from thereon.

    The rent you pay is not tax deductable as it is a private expense.

    This article by the NTAA, allbeit for professional accountants, is a very good essay on the use of Hybrid trusts for tax planning purposes.

    National Tax & Accountants' Association - Your Association at Work - Using hybrid trusts - advanced tax planning ..and click on the PDF link.

    I wouldn't use hybrid trusts myself, as the ATO don't like them IF THERE IS ANY DISCRETIONARY ASPECT to them at all.

    If you must - then first get an ATO private ruling on the setup.
     
  3. MattR

    MattR Well-Known Member

    Joined:
    23rd May, 2007
    Posts:
    229
    Location:
    Sydney
    Don't forget Land Tax aswell.