Can trust distributions offset individual capital gain losses?

Hypothetical questions.

If an individual has some capital gain losses from say selling shares or property.
Can trust distributions income be used to offset this capital gain loss?

 

No, but the capital losses could be used to offset the gains

 

Thanks Terry

 

Yes, maybe. The trust distribution will retain its character when it flows through. If the trust has capital gains to distribute within total trust income a beneficiary may be taxed on that. However if the beneficiary has CGT losses these will reduce the taxable gain. Note that 50% discounts can be reduced since the formula reduces gains by losses THEN allows a 50% discount.

eg Trust dist CGT amount $100 (Discounted), Taxpayer has property CGT loss $50. The beneficiary would have $200 CGT gain - $50 loss = $150 total net gain. Less 50% = $75 taxable.

If the trust has no capital gains in its income then the loss remains unaffected and carries forward

 

Thanks for the detailed info paul