All Topics / Legal & Accounting / Selling Units back to Hybrid Discretionary Trust

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  • Profile photo of apapworthapapworth
    Participant
    @apapworth
    Join Date: 2005
    Post Count: 14
    April 7, 2005 - 11:59 pm

    Hi All,

    Can anyone direct me as to the possiblity, pros and conns of an individual selling back units (same price as purchased for) to help pay back interest and/or principle on a loan borrowed to originally purchase the units in the HDT?

    Thanks,

    Adam

    Profile photo of tonyy21692tonyy21692
    Member
    @tonyy21692
    Join Date: 2003
    Post Count: 128
    April 13, 2005 - 5:23 am

    Hi Adam

    do you mean the income units that were issued to enable deductablity of interest at an individual unit holder level?

    If yes, then you have the HDT redeem when you are +ve geard to allow the trustee to redirect the income to a beneficiary with the lowest marginal tax rate otherwise why redeem them as you lose your interest deductibility? Does this make sense?

    Regards
    Tony

    Profile photo of apapworthapapworth
    Participant
    @apapworth
    Join Date: 2005
    Post Count: 14
    April 15, 2005 - 1:03 am

    Hi Tonny

    Yes, I was talking about the units issued by the HDT to claim as a deduction.

    The reason for my thinking of redeeming them when positive is to pay some of the principle back, but I see your point of loosing deductability – Never looked at at it this way.

    Adam

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