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ARTICLE · 20 AUGUST 2008

Hybrid Trusts

Moore Australia
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In recent years much has been said of the use of a hybrid trust. The term is not specific and includes many different types of trusts, where there may be different entitlements to revenueand capital.

AustraliaTax
Ray Simpson
Ray Simpson
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In recent years much has been said of the use of a hybrid trust. The term is not specific and includes many different types of trusts, where there may be different entitlements to revenueand capital.

It is argued by some that this type of trust provides for all the benefits flowing from a discretionary trust (the flexibility to deal with income) with the advantages of being able to use negative gearing in respect of fixed entitlements to income, usually through units issued with such rights.

At one level the 'flow through' characteristics of a trust and the ability to stream trust income Tax Ruling (TR 92/13 Income Tax: Distribution by trustees of dividend income under the imputation system) provides substantial flexibility and the potential to reduce overall income tax liabilities. On the other the dichotomy between tax law (s95) income and trust law income provide many complexities that are as

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