From $242 (INCL GST) for email version
Unit Trusts differ from Family Trusts in that the beneficiaries are defined via ownership of Units in the Trust rather than by family relationships. These Units are much the same in concept to Company Shares and represent a direct portion of the value of the Assets held by the Trust.
A Unit Trust is often used for business arrangements where, for example, a group of people or entities are investing in a large asset (or assets) and want to apportion the value and income from these assets across the group. Units can be transferred between individuals (at an agreed value) and new units issued where the required proportion of Unit Holders approve.
Click here to view an outline of the roles in a Unit Trust.
Fixed Unit Trust Deed
Designed to take advantage of Schedule 2F of the Income Tax Assessment Act 1936(Cth) (tax loss provisions) and the Land tax Management Act 1956(NSW) (Land Tax Threshold Concession).
All Trustee discretion with regard to Income is removed and entitlements are absolutely fixed. This is a Deed designed for a specific purpose and advice should be sought before executing this type of Deed.
- A4 binder (white or grey)
- 3 (2 bound, 1 loose leaf) copies of the trust deed
- Instruction sheet
- Stamping instructions
- Statutory Declaration
- Notes for the assistance of the Trustee
- Minute page if Corporate Trustee
- Register of Unit Holders
- Application for Units
- Unit Certificate
PDF email delivery
Full Service Courier delivery
How long does it take to establish a Fixed Unit Trust Deed?
For email delivery orders, the Trust Deed and related documentation will be emailed to you within 15 minutes of placing your order. If you have ordered a Fixed Unit Trust package -which includes a Trustee company - we need to register the Trustee company before establishing the Trust which means delivery may take up to a hour for both the company register and the Trust deed..
We are able to deliver our full service couriered product to the Sydney metropolitan area within about 4 hours of receiving an order. Orders received before 12 midday are usually delivered the same day. Documents being sent to Brisbane and Melbourne will be sent by courier and are often delivered the next day (order must be received by 1pm for delivery the next day) and within a couple of days to Perth and regional areas.
Duty Stamping of Trust Deeds
Please note that the Stamp Duty cost is not included in the listed price for the Unit Trust Deed. Trust Deeds established in either NSW or Victoria need to be duty stamped upon execution.
NSW The Office of State Revenue fees are $500 for the original trust deed and $10 for subsequent duplicates on top of the above trust deed prices. A service fee of $77 including GST is applicable.
Victoria The State Revenue Office fees are $200, regardless of the number of duplicates, on top of the above trust deed prices. A service fee of $77 including GST is applicable.
What is a Standard Unit Trust?
A Standard Unit Trust is a Trust divided into units all of the same class that gives the Unit holders equal rights to vote and share in the distribution of income and capital in proportion to the number of Units held.
A Unit Trust does not have a Settlor.
What is a Multi-Class Unit Trust?
This form of Trust is a Trust with different classes of units each having different rights to share in the distribution of capital and income. Some units may have a right to vote and others may not, similar to different Shares in a company structure. Our Multi Class Unit Trust provides 13 different classes of Unit each with differing rights.
What is a Fixed Unit Trust for NSW Land Tax purposes?
Revenue NSW’s definition of a Fixed Trust states that it is a trust where the beneficiaries (or Unit Holders) are considered to be owners of the land at the taxing date of midnight on 31 December prior to the tax year.
This type of Trust applies only to NSW. It is a standard Unit Trust whereby the unit holders are entitled to a fixed proportion of income and capital distribution from the Trust. Revenue NSW stipulates that the Deed must meet the following criteria:
- The unit holders are entitled to all income of the Trust (after the payment of normal expenses)
- The unit holders are presently entitled to the capital of the Trust and may require the Trustee to wind up the Trust and distribute the property or the net proceeds of the Trust
- Unit Holder entitlements cannot be removed, restricted or otherwise affected by the exercise of any discretion or by failure to exercise any discretion.
- There must only be one class of units issued and the proportion of trust capital to which a unit holder is entitled on winding up or surrendering of units must be fixed and must be the same as the proportion of income of the trust to which the unit holder is entitled.
If a Trust meets the requirements of section 3A of the Land Tax Management Act, then the Trust will not, for Land Tax purposes, be deemed a Specialty Trust and will be entitled to the benefit of the Land Tax threshold exemptions available in NSW.
What is a Hybrid Unit Trust?
A Hybrid Unit Trust combines a Multiclass Unit Trust with a Family Trust component to allow a Trustee to distribute to the lineal and lateral relations of the Unit Holders in addition to Unit Class related distributions.
How is a Trustee in a Unit Trust changed?
The Patricia Holdings Unit Trust provides that 62% of the Unit Holders have the power to remove and appoint a Trustee (clause 34). This percentage is a purely arbitrary figure and could be any other percentage as long as it is a majority percentage.
How is a new Trustee added to a Unit Trust?
To add a new Trustee is relatively simple. The appointment can be made verbally or in writing; preferably in writing. The appointment is made by a 62% majority vote of the Unit Holders. Generally the appointment is in the form of a Trust deed because a Trust deed is a more legally binding document. The additional Trustee must when accepting the appointment undertake to carry out the duties of Trustee and discharge the obligations contained in the Trust deed and at law.
How do you remove a Unit Holder?
Much like in a company structure, a Unit Holder can sell his or her units back to the Trustee if the Trustee agrees to re-purchase the units. Alternatively, the Unit Holder can sell them to the other Unit Holders (transfer of Units) in the Trust. If no Unit Holder wants to purchase the Units then the units may be sold on the open market if a purchaser can be found.
What is the minimum number of units one can have in a Unit Trust?
In a Unit Trust, the Trustee issues units to the Beneficiaries of the trust assets. There can be as few as one unit issued in a Unit Trust although, to avoid the possibility of a Unit Trust being deemed to be a Fixed Trust, there should be at least two units issued.
How is the name of a Unit Trust changed?
Patricia Holdings can help change the name of your Trust. The Trustee elects to change the name of the Trust and then confirms that election in writing. A Trustee must ensure that if a Trust changes its name that every person who has business dealings with the Trust and every Nominated Beneficiary of the Trust are notified of the change of name. We can provide all the paperwork required for $187 delivered as a PDF or $220 for printed and couriered documents.
Does a Unit Trust have to have a Trustee?
Yes, every Trust must have a Trustee. This is because the law requires that for a Trust to exist there must firstly be some Trust property and secondly, it is the Trustee (or Trustees) who hold the Trust property on Trust for a Beneficiary or Beneficiaries (there must be a separation between the legal and equitable ownership). A Trust is not considered a legal entity.
How is a Unit Trust wound up?
A Trustee winds up a Trust by:
- making a Declaration (in writing) that the Trust is to vest (that is the Trust ends and the Trust assets be distributed to the Unit Holders);
- collecting in all of the Trust assets and converting them into cash (unless the Trustee proposes to make an in specie distribution);
- all debts of the Trust must be paid and all tax must be paid;
- The assets (or cash) are then distributed amongst the Unit Holders according to the Unit Holdings in the Unit Trust Deed;
- notice is then given to the Taxation Department that the Trust has ceased to exist.
If a Unit Holder in a Unit Trust is a Trust, who is to be named as the Unit Holder?
Much like holding shares in a company, as a Trust is not a legal entity, it cannot be named as the beneficiary. Instead, it should be listed as the Trustee of the Unit Holding Trust “as trustee for” the Trust
Who can be the Trustee of a Unit Trust?
Any individual, company, or incorporated association can be a Trustee provided that the person or directors are not bankrupt, minors, or disqualified persons.
Must the Trustee of a Unit Trust have an Australian address?
The Trustee must have an Australian address as they have Governance responsibility for the Trust and therefore need to be accessible to the Legal Jurisdiction under which they operate. The state or territory of Jurisdiction can be nominated, but should the Trust be subject to legal proceedings, this is only one of the factors that will be taken into account when determining the appropriate Jurisdiction for the action.
How long does a Unit Trust last?
A Trust must vest (be wound up and its assets distributed) within 80 years of being set up (except in South Australia where the Law relating to perpetuities does not apply). The Patricia Holdings Trust deed provides for the Trust to have a maximum life of 79 years. A Trust can be wound up at any time within the 79 years.
What is the difference between a unit trust and a company?
These are two totally different things – a trust is an arrangement between 2 or more parties. It is a set of responsibilities that are imposed on a nominated party (the trustee) to hold assets on behalf of another party. A company is a legal entity registered with ASIC, that exists separately from its owners (its shareholders). A company’s status as a separate legal entity gives it the same rights as a natural person, meaning it can be sued, is liable for debts and it can sue another entity.
Should I use a corporate trustee for my Unit Trust?
A corporate trustee has several advantages over an individual trustee:
A corporate trustee, being a separate legal entity, can exist indefinitely, whereas individual trustees will eventually die, may become incapacitated, or may want out for another reason.
Legal ownership of the trust assets
Assets in a trust are held in the name of the Trustee on behalf of the trust. If individuals act as the trustee of your trust and you later want to change the trustee, you will have to change the legal owner of your trust’s assets. Conversely, you can simply change the shareholders and directors of a corporate trustee which will not change the legal owner of the trust’s assets.
Asset protection & limited liability
Individual trustees can be personally liable for any loans taken out or liabilities that the trust may incur. If a corporate trustee is used, liability will generally be limited to the assets of the trustee company itself.
Who owns the trust assets in a Unit Trust?
A trust is not a legal entity in itself and cannot own property. Instead a trust describes a relationship between various parties whereby a trustee or trustees (the legal owner) hold trust property on behalf of beneficiaries (the beneficial owner(s)). In the context of a unit trust, the trustee holds the trust property on behalf of the unit holders. The income and distributions of the trust are split between the unit holders according to the units held.
Unit Trust Deeds can be established as an alternative to a Company, if appropriate in your situation. Managed by trustees, assets of a Unit Trust Deed are held by the Trustee, Unit Holders own a share of the Trust Deed in accordance with the number of units held.
How to Order
Order by email
- Download Order Form – Unit Trust Deed.pdf