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SMSFs investing in Unit Trusts – Tips and traps to watch out for

In this episode of the DBA Lawyers Podcast, Zacharia Galloway, Lawyer and Shaun Backhaus, Lawyer, discuss SMSFs investing in unit trusts including 50-50 unit trusts and non-geared unit trusts (NGUT).

Unit trusts are a popular investment vehicle for SMSFs as it allows for SMSFs to enter into investments with both related and unrelated parties. There are various risks that must be managed when an SMSF invests in a unit trust and these are often overlooked. In this episode of the podcast, Zac and Shaun give a broad overview as to what some of the most common traps are and how the risks can be mitigated.

Zac and Shaun also discuss the relevant tests to ‘delicately’ manage with a 50-50 unit trust such as the control and sufficient influence test, the requirements that must be continually met for a NGUT, as well as how a unitholders agreement can be a used to govern the terms between the unitholders in a unit trust.

Shaun will be presenting DBA Network Pty Ltd’s SMSF Online Update on 7 May 2021 and will be covering SMSF and Bankruptcy plus much more. To register, please click here.

For a chance to have your SMSF query addressed on the show, please send your questions to [email protected]

Related articles and links below.

SMSFs and 50-50 Unit Trusts

Trustee and unitholder liability in unit trusts

SMSFs investing via unit trusts

DBA Network

DBA Lawyers

Hosts (in order of appearance): Zacharia Galloway, Lawyer and Shaun Backhaus, Lawyer

30 April 2021