Unit trust structure diagram

Fully online, legally compliant trust deed instantly delivered to your inbox. One stop solution for your trust structure needs. The structure is protected from claims by creditors of unit -holders although a unit -holder’s interest in the structure may be seized by creditors. Also, unit -holders are protected from claims by creditors of the structure. The availability of asset protection is based upon the structure itself.

The beneficiaries subscribe for the units in much the same way as shareholders in a company subscribe for shares. What is the unit trust structure? In a UT the unitholders have a fixed right to the income or capital of the trust and will receive the same in the proportion of units they hold compared to the total units on issue (on a similar basis to a company and its shareholders).

For example, they both allow participants to have a proportionate interest in the structure : units in a unit trust and shares in a company. However, they do have key legal and tax differences which will affect your decision as to which structure is best for you business operations. You should therefore understand the advantages and disadvantages of both structures. This means that unit trusts pre-determine the unit holders entitlements, which may be for income, capital or both. While in legal terms a trust is a relationship not a legal entity, trusts are treated as taxpayer entities for the purposes of tax administration.

Any income not distributed is taxed automatically at the highest marginal tax rate. Each unit issued represents an undivided share of the underlying trust fund and carries the rights attaching to such unit as set out in the trust instrument. Master Trust : A master trust is an investment vehicle that collectively manages pooled investments. It can refer to the main fund where assets are pooled and collectively managed in a master.

Unit trusts, as separ. The trustee is legally liable for the debts of the trust and may use its assets to meet those debts. A trust is not a separate legal entity. However, if there is a shortfall the trustee is responsible for the difference.

In this guide, the term “fund” will also refer to a unit trust. The difference between these and unit trusts is that ILPs combine life insurance. For instance, a trustee may carry on a business for the benefit of a particular family and distribute the yearly profit to them. Unit Trusts have a bid–offer spread , i. The investors are the beneficial owners of the trust property and their interests are represented by units in the unit. Structure : Using a private unit trust One of the most common structures to use for a private property investment syndicate, as opposed to a managed investment fund where investors are procured from the public at large, is an unlisted private unit trust.

If you are involved with a unit trust structure (as trustee, manager or unitholder), and are in any way unsure of the legal nature of a unit trust , then you should read this article. It will assist you to fully appreciate the nature of a unit trust , the rights and obligations involved between the parties and that a manager can be considered a trustee for liability purposes. Broker: Discuss your unit trust needs with a broker to find a unit trust that matches the level of risk you are prepared to take.

Direct from fund management company : You can apply directly with a fund management company, like Hargreaves Lansdown , who will take you through the application process. The legal structure has been designed to prevent others from stealing your money. The Financial Services Board regulates unit trusts and the professionals who make the investment choices for you. Investment risk is usually lower than for other types of investments. This means that if one.

To keep things simple the manager will combine the various incomes and pay it out to investors on pre-determined dates. These tend to be twice yearly, quarterly or monthly. Data from the AIC shows that over years £1invested in the typical investment trust would be worth £282.

A unit trust spreads your money across many investments.