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ARTICLE · 22 JANUARY 2009

Update On Negative Gearing Trusts

Cooper Grace Ward
Cooper Grace Ward
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Cooper Grace Ward

Cooper Grace Ward

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There were a number of developments in relation to hybrid trusts in late 2008. The ATO issued a number of alerts and TD 2008/16 outlining problems with claims for deductions for interest paid on loans to "hybrid" trusts.

AustraliaFinance and Banking
Greg Cahill
Greg Cahill
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There were a number of developments in relation to hybrid trusts in late 2008.

The ATO issued a number of alerts and TD 2008/16 outlining problems with claims for deductions for interest paid on loans to "hybrid" trusts.

The scenarios outlined in these publications are markedly different to those in which the Cooper Grace Ward Negative Gearing Trust (NGT) is used. In our view, the Alerts and Determination do not impact at all on the validity of the NGT arrangements.

However, the ATO did issue a private ruling to a client of Cooper Grace Ward (PBR 88113) in which they ruled that where the beneficiary borrows from an external lender and then advances the funds to a related NGT:

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