If a financial advisor is giving you tax advice, I would be more concerned than if it was the other way round!!
But in all seriousness I don't see at all how this should be in the domain of a financial advisor. A financial advisor wouldn't have a chance of picking up on or recommending this as they would have no idea of the tax benefits involved as they are not trained in tax (or at least can't advise on it in any more than broad terms in relation to investments).
Found this old post .Scenario - LTC shares will be sold to a trust. Trust will have 2 original shareholders mum and dad and 2 children 19 and 12 yrs as beneficiaries . If the Trust charges interests to LTC for loan (hence income is received into trust), then trust distributes the income to the beneficiaries, (1) does the income needs to be allocated back only to the original shareholders or (2) can it be distributed say to the 19 year old.
In other words , is there a tax rate differential advantage aside from other known trust benefits?.
Last edited by BlueSky; 11-01-2017 at 11:25 PM.
Subject to restrictions in the Trust Deed, a trust can distribute income to any beneficiary. This is a big tax benefit of trusts, and is well known.
But there would be no income to distribute in the case you describe - trust charges LTCinterest, generating income for trust, but LTC pays interest and passes this loss on to shareholders (the trust) negating said income.