We have some excellent news for anyone currently using, or planning to use, a hybrid trust for their property investing.
Our partners at Macquarie Group Services (MGS) have finally got something in writing from the Tax Office, confirming exactly what they do and don’t want to see in trust deeds in order to happily allow full deductibility for unitholders.
MGS are now recommending, on the back on their discussions with the tax office, that all clients with a hybrid trust should now update their trust deeds as soon as possible. We can help you with that update, even if you first established your trust using another accountant or law firm. We’ve organised a very simple process to get that happening for you, so just drop either myself or Maxine a line if you’d like our help or if you have any questions.
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Please be aware that very few lenders are willing to lend to Hybrid trusts these days. Many lenders that previously funded properties in HTDs will no longer allow increases. This often means refinancing to a diminishing pool of lenders which can be costly.
I like HDTs but they’re not much good if you can’t borrow money.
Hi Peter,
A perfectly valid point, absolutely. No point having a beautiful structure if you can’t use it for finance. That said, we have seen successful finance with all of the big four banks recently. We’re also expecting that soon, with much greater certainty from the tax office, that the finance side of things should improve as well.