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Negative gearing

Discussion in 'Accounting, Tax & Legal' started by rajiv, 10th Sep, 2008.

  1. rajiv

    rajiv Member

    Joined:
    16th May, 2008
    Posts:
    16
    Location:
    Perth, WA
    Hi,

    Is it possible to do negative gearing through Family Trust with a Company as a trustee? What are the advanatage or disadvantages?

    Thank.

    Cheers,

    Rajiv
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Not directly - losses are quarantined within a trust and are not distributable to the unit holders ... thus they cannot be used to offset other income sources outside the trust.

    There are alternative structures, usually referred to as "hybrid trusts", which use a combination of discretionary trusts and unit trusts to achieve negative gearing situations - but they are a bit more complicated, and I believe are still under review by the ATO.

    We have a few hybrid trust experts here (NickM, our resident accountant is one such expert).

    Having a company as a trustee (as opposed a personal trustee) doesn't make any difference to the issue of negative gearing.
     
  3. rajiv

    rajiv Member

    Joined:
    16th May, 2008
    Posts:
    16
    Location:
    Perth, WA
    Access to Nick

    Hi,

    Is Mr. Nick accessible through this website to discuss issues on Hybrid Trust?

    Thanks.

    Cheers,

    Rajiv
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Yes he is able to discuss the concepts and issues with hybrid trusts in a general sense (and we encourage that) - but for specific advice, you'd need to make an appointment directly with Strategic Wealth Management.