Unit Trust

What’s in our package?

This package provides the necessary documents to establish a unit trust. It includes:

• Letter;
• Relevant ATO forms;
• Trustee minutes;
• Memo;
• Deed;
• Application for initial units;
• Unit certificates; and
• Register of unitholders.

Note: Stamp duty is $200 in Victoria and $500 in NSW. Stamp duty can be higher if there is greater than $15,000 of assets in the trust at execution. Stamp duty in other jurisdictions varies depending upon the State or Territory involved.

About the unit trust

The DBA unit trust (‘UT’) is prepared as a fixed trust. This means that a unitholder has a fixed entitlement to income and capital. Thus, less onerous tax provisions apply such as the trust loss and franking credit provisions.

Note that there are many suppliers whose UTs are not fixed. These trusts may not satisfy the strict rules on the carry forward of losses and the distribution of franking credits.

Why you should choose a DBA unit trust

The DBA unit trust contains the following features:

• Income is aligned to taxable income;
• Includes ‘buy-sell’ type provisions for assisting incoming and exiting unitholders to arrive at a fair value in an orderly process; and
• Comprehensive range of forms to assist in future administration, including precedent unit certificates, register of unitholders and application form.

Corporate trustees of unit trusts

If you are establishing a new UT, you should consider the advantages of a corporate trustee over individual trustees.  The long-term benefits of a company generally outweigh the up-front cost of incorporation.  Some of the main advantages are:

• Asset protection for the directors from third party claims
• Greater protection from trustee taxation liabilities
• Clear separation of ownership of trust assets from individually owned assets