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Trust payments to beneficiaries

Discussion in 'Accounting, Tax & Legal' started by RoyG, 21st Mar, 2015.

  1. RoyG

    RoyG Member

    Joined:
    13th Mar, 2011
    Posts:
    8
    Location:
    Perth WA
    Hi

    If a discretionary trust was formed with the beneficiaries being my wife and myself.
    If my wife gave by deed of gift money from her personal account to the trust and I then borrowed the money from the trust on commercial terms and interest rate under proper loan agreement and by mortgage secured over property. The trust then distributes the income to my wife as taxable income. Would the ATO allow this/ have a problem with this ?

    RoyG
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    There is a private ruling which allows one spouse to borrow from another, so this is a similar arrangement which may pass. However if it was your money origianally then maybe Part IVA could be applied to deny.