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Unit Trusts: Current Issues

Published on 23 Sep 2009 | Took place at RACV Club, Melbourne, VIC

The popularity of unit trusts as a collective investment vehicle has declined in recent years, especially where the small business CGT concessions are relevant to a choice of structure. Is there still a role for unit trusts as a collective investment vehicle? What about the changes in the small business CGT and Division 7A provisions, and the release of Tax Determination TD 2009/7 regarding interest deductions?

This event analysed the pros and cons of structuring via a unit trust for business and investment.

Individual sessions

Unit trusts: Current issues

Author(s):  Jeffrey CHANG

This presentation covers:

  • unit trusts versus fixed trusts, the nature of "fixed entitlements", and the relevance of these concepts for trust losses, franking credits & superannuation fund investors
  • what do hybrid trusts look like, how effective & useful are they, and what are the risks associated with them?
  • when might a unit trust be preferred over a partnership of discretionary trusts?
  • is a unit trust subject to perpetuity period rules?
  • characterisation of unpaid present entitlements
  • impact on unit trusts of proposed changes to Division 7A
  • Div 152 structuring - the impact of the revised definition of "affiliate"
  • Div 152 structuring - the problem with different classes of units
  • hybrid trusts - interest deductibility on borrowings to acquire units following TD 2009/7
  • fixed trust cloning.
Materials from this session: