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Fixed Unit Trusts

Discussion in 'Accounting & Tax' started by wayne, 29th Jul, 2016.

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  1. wayne

    wayne Active Member

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    With a fixed unit trust - is it possible to vary the unit allocation (%) at a later time?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It depends on your definition of 'fixed'.
    For NSW land tax purposes a trust would not be fixed if the trustee could vary or alter the entitlements of unit holders.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    But the allocation of units can be varied by the parties transferring the units.

    There is no stamp duty on the transfer of units in NSW trusts anymore (unless the trust owns more than $2mil in property).

    But there would be CGT.
     
  4. wayne

    wayne Active Member

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    Would that mean, to satisfy the definition of a fixed trust and retain entitlement to a NSW land tax threshold, the transfer of units within the trust is acceptable.

    our trust structure is setup with a corporate trustee (we (x2) are directors) of a single trust holding two NSW IP's and both are beneficiaries.

    Can we vary unit allocation from 50/50, 80/20, 90/10..........
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes

    Yes you could transfer the units between the parties
     
  6. wayne

    wayne Active Member

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    Thanks
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    But get specific legal advice as there are various consequences involved in transferring units