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Negative gearing through HDT

Discussion in 'Accounting, Tax & Legal' started by MiddleClassMonkey, 10th Aug, 2007.

  1. MiddleClassMonkey

    MiddleClassMonkey Well-Known Member

    Joined:
    30th Jun, 2007
    Posts:
    49
    Location:
    Sydney, NSW
    I understand the concept of neg gearing through HDT (that is, buying units individually, then HDT buying the actual property).

    My question is, can depreciation (that is, a paper 'cost') of a HDT-owned property also be passed onto its unit-holding beneficiary?

    MCM
     
  2. artgul

    artgul Well-Known Member

    Joined:
    16th Aug, 2005
    Posts:
    77
    Location:
    Sydney
    Hi MCM,

    I belive that the answer to your question and more can be found in the August issue of the API magazine. Look for the article written by Dale under the tax section.

    In short, I'd say that the answer to your question would depend on your HDT deed :cool:

    Rgds,
    artgul
     
  3. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    If the Trustee is the holder or owner of the asset then normally they would be entitled to the depreciation deductions.

    But you may have a gift & loan-back arrangement for some reason where the beneficiary is the owner but the the Trustee has security over the asset.

    Need to check the terms ...

    Cheers,

    Rob