Can a Trust help me offset property losses?

Question from gabe updated on 9th July 2010:

Can a family trust transfer losses from rental property to a beneficiary in addition to income from other investments such as shares and unit trust?

Our expert Mark Withers responded:

Property losses within a trust can certainly offset other income sources with the trust to lessen it's overall taxable income. If there is still a taxable income in the trust after the property loss has been offset this resulting net income can be distributed to beneficiaries.

If the result of the property loss is that the trust has no net taxable income and has in fact made a loss this loss can not be distributed to beneficiaries and must be carried forward by the trust where it can be used only to offset future taxable income derived by the trust. I hope I've understood your question correctly. 

Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.


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