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Fixed trusts and unit trusts: One and the same?

Published on 01 Dec 13 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

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
Current at 12 December 2013
 
Tara Lucke
Current at 19 March 2013 Click here to expand/collapse more articles by Tara Lucke.

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Matthew BURGESS

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