A hybrid trust is a particular type of trust that combines the best elements of a discretionary trust and a unit trust in the one entity. This structure is useful for holding capital growth and income-producing assets such as rental properties.

The advantages of a hybrid trust are:

  • Can save tax by streaming different types of income between the various beneficiaries.
  • Unitholders can claim a tax deduction for interest incurred to purchase their units.
  • Asset protection - helps protect from bankruptcy and insolvency.
  • Easy for new owners to join and old owners to leave.
  • Beneficiaries can access the 50% capital gains tax discount.