Unit trust, hybrid trust question

Discussion in 'Accounting & Tax' started by thesuperman, 16th Apr, 2017.

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  1. thesuperman

    thesuperman Well-Known Member

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    Consider this situation, a property is held in a unit trust for many years. The unit holder of the unit trust is a hybrid trust. The sole initial unitholder (Person A) of the hybrid trust is entitled to 10 "income units" at $1 value each in the trust deed. If that property is sold for a $100k capital gain after many years, how does the $100k capital gain go through the trusts into individual(s)? Being a hybrid trust will the $100k go to Person A?

    Considering a hybrid trust is a mix of a discretionary trust & unit trust since it's a capital gain it's treated as capital in the hybrid trust so it can go to Person A or their husband/wife/children/related discretionary or unit trusts of these family members or a mix of any of these?
     
    Last edited: 16th Apr, 2017
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Hybrid trust is a generic term. It will entire depend on the terms of the deed.