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Fixed trusts and unit trusts: One and the same?


There is some uncertainty about what a fixed trust is for taxation purposes. Following the Federal Court decision in Colonial First State Investments Ltd v FCT in 2011, it seems that, for taxation purposes, very few traditional unit trusts will satisfy the strict definition of a “fixed trust”. This article considers the specific requirements for a trust qualifying as a fixed trust and the relevance of the fixed trust concept for taxation purposes.

Specifically, this article examines whether fixed trusts and unit trusts are the same, unit trusts and franked dividends, the status of distributions that are not fixed, borrowing by unit trusts, unit trusts as investment vehicles, risks posed by trust loss rules, the tax implications of converting a non-fixed trust into a fixed trust, and the consequences of CGT event E4 for unit trusts.

Author profiles

Liam Polkinghorne
Liam is a Lawyer at McCullough Robertson. - Current at 01 May 2014
Tara Lucke FTI
Tara is a director and co-founder of the specialist law firm, View Legal Pty Ltd. Her favourite aspect of her work is getting to know her clients’ business and family. To help her clients achieve their goals, Tara places high importance on working collaboratively with their existing advisers to deliver effective and appropriate solutions for tax planning, estate and business succession planning, and asset protection. As a founder of View Legal Pty Ltd, Tara is committed to building a law firm that she would choose to use herself. To this end, she is passionate about exploring innovations in the legal industry, particularly in relation to using technology and fixed pricing to provide quality solutions and price certainty for clients. Tara is a fellow of The Tax Institute and is regularly published in Australia’s leading monthly tax journal, The Tax Institute’s Taxation in Australia and the leading weekly tax journal, Thomson Reuters’ Weekly Tax Bulletin. - Current at 07 April 2015
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Matthew Burgess CTA
Photo of author, Matthew BURGESS Matthew co-founded specialist firm View Legal in 2014, having been a partner of one of Australia's leading independent law firms for over 12 years. Matthew's passion is helping clients successfully achieve their goals. Matthew specialises in tax, asset protection, estate and succession planning, providing strategic advice to business owners and high net worth individuals, and was recognised in the "Best Lawyers" list for 2014 in relation to trusts and estates. As an author, Matthew is widely recognised as an expert in his field, who constantly creates bespoke revenue-related strategies for the growth, management and protection of wealth. Matthew is regularly published in Australia's leading monthly tax journal, The Tax Institute's Taxation in Australia (six articles since 2012), and the leading weekly tax journal, Thomson Reuters' Weekly Tax Bulletin (10 articles since 2012). He has also written five legal books, one business book and 16 children's books. - Current at 01 June 2016
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