Unit Trust - non-fixed
Create all the documents you need to set up a Non-Fixed Unit Trust through Cleardocs. This type of trust has two classes of unit holders:
- one class with an entitlement to income at the discretion of the trustee; and
- one class with an entitlement to income and capital proportional to their unit holdings.
Time taken to complete 15 minutes.
Cost $ 159.50 (inc GST)
Printing Optional printing, binding and delivery for $ 66.00
Certificate Optional stamping service in Victoria for $66 plus government fees
Legal Sign-off The master documents are written in plain language and are signed-off by our lawyers at Maddocks.
What documents are included in the Unit Trust - non fixed package?
The Cleardocs document package for an Australian Unit Trust — non-fixed includes:
- the Trust Deed;
- Consent to act as Trustee (and related minutes if the trustee is a company);
- Application for Units;
- Unit Certificate(s);
- Register of Unit Holders; and
- an Establishment Kit explaining what to do next.
What information do you need to order a Unit Trust – non-fixed through Cleardocs?
Our checklist outlines all the information you require.
Structure of the Cleardocs Unit Trust – non-fixed
The Cleardocs Unit Trust — non-fixed is a trust under which:
- ordinary units of the one class are created and issued to the ordinary unit holders; and
- income units of the one class may be created and issued to income unit holders.
Each unit holder has the rights and obligations specific to the types of units they hold:
- income unit holders may receive amounts of income from the trust if the trustee, in its absolute discretion, makes a determination to that effect; and
- ordinary unit holders are entitled to a proportion of income (subject to any income first being paid to an income unit holder) and to capital distributions equal to their proportional holding of all of the total issued ordinary units in the trust.
This trust deed contains provisions for ordinary units and a special class of income units. The trustee(s) and unit holder(s) named in the trust deed should be aware that:
- the rights and obligations which apply to each class of unit are very different; and
- the unit trust will not be a fixed trust for tax and duty purposes.
If you require:
- a "fixed" unit trust that allows only ordinary units, then click here to order it from Cleardocs — remember, unit holders in a "fixed" unit trust can claim a tax deduction on borrowing costs associated with their unit holding; or
- unit trust with different classes of units, or if you wish to have special classes of units, then you must seek legal advice. Please contact us so that we can refer you to Maddocks who can provide you with a free estimate of fees for drafting the necessary amendments to the Cleardocs unit trust deed so that it suits your needs.
What is the difference between a unit trust that is "fixed" and one that is "non-fixed"?
The differences between the two types of unit trust are shown in this table:
|Option||Classes of unit holders||Who are the unit holders?|
|Unit trust – fixed||1||One class of ordinary unit holders, with the same rights to capital and income distributions of the trust in proportion to their unit holdings.|
|Unit trust – non fixed||2||
1. Ordinary unit holders, with rights to capital and income distributions of the trust in proportion to their unit holdings; and
2. Income unit holders who may, at the trustee's absolute discretion, receive distributions of income of the trust.
If the trust is "non-fixed", then no unit holder or class of unit holders has a fixed (proportional) entitlement to income of the trust. This has important implications — for example, unit holders cannot claim a tax deduction on borrowing costs associated with their unit holding.
Which type of unit trust suits you or your client?
If you are not sure which type of unit trust suits you, or your client, then you need to speak with your lawyer or accountant. We can arrange for you to speak with our lawyers at Maddocks, but this is not part of the free legal helpline, so the firm will charge you for its time.
Purchasing real estate in NSW?
In New South Wales, a trust which is a "fixed trust" under the Land Tax Management Act 1956 (NSW) pays less land tax on real estate it holds than other kinds of trusts. This is because "fixed trusts" get the benefit of the NSW land tax threshold (and only pay land tax on properties valued above the threshold).
Other trusts may not get the benefit of the threshold - and be liable to pay land tax on land they hold regardless of the value.
This concept of a "fixed trust" under NSW land tax law is different from a "fixed trust" under income tax law. A fixed unit trust may be one but not the other.
To be a "fixed trust" under NSW land tax law, the trust deed must be submitted to the NSW Office of State Revenue and classified as a fixed trust under the Land Tax Management Act 1956 (NSW). Click here to find out what the requirements are.
The Cleardocs Unit Trust - non-fixed cannot be produced in a form that can be submitted to the NSW Office of State Revenue for classification as a fixed trust under the Land Tax Management Act 1956 (NSW).
The Cleardocs Unit Trust - fixed may be suitable for being registered as a "fixed trust" for NSW land tax purposes.
Cleardocs stamping service — Victoria
Cleardocs offers a stamping service for deeds executed in Victoria. You can select the option for Cleardocs to duty stamp your trust deeds with the State Revenue Office Victoria on your behalf when you set up your trust.
Seek legal advice
The non-fixed Unit Trust information here should be considered general in nature, and in no way interpreted as legal advice. You must always seek your own independent legal, accounting and financial advice about your particular situation. The summary on this page is for information purposes only.
Questions or further information
If you have questions:
- about how to use Cleardocs, contact the Cleardocs helpline on 1300 307 343.
- about legal issues, contact the Cleardocs helpline on 1300 307 343. If you need advice, we will arrange for you to speak with a lawyer at Maddocks. The firm provides a free legal helpline in relation to the documents Cleardocs provides. If you require other legal advice in relation to your particular circumstances, then this will be charged for.
- Full range of tailored unit trust set up documents
- Your trust can play a role in your asset protection strategy
- Copy function for address details — saving you typing
- Extensive online help and local phone support
- Lodgement with ASIC 24/7 using our electronic lodgement portal
- Easy to use question interface
- Change the trustee of your unit trust through Cleardocs
- Stamping service for trusts executed in Victoria