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Cleardocs now offers a non-fixed unit trust

On behalf of our Member Benefit Partner, Cleardocs, we give you a choice of both "fixed" and "non-fixed" unit trusts. In the past, the Unit Trust that Cleardocs provided was a "fixed" unit trust.  The difference is explained below.

As always, master documents, interfaces etc. for the new Unit Trust - non-fixed are signed-off by their lawyers at Maddocks.

What's a "Unit Trust - non-fixed"?

In the Cleardocs Unit Trust - non-fixed:

• ordinary units of the one class are created and issued to the ordinary unit holders; and
• income units of the one class may be created and issued to income unit holders.

Each unit holder has the rights and obligations specific to the types of units they hold:

• income unit holders may receive amounts of income from the trust if the trustee, in its absolute discretion, makes a determination to that effect; and
• ordinary unit holders are entitled to a proportion of income (subject to any income first being paid to an income unit holder) and to capital distributions equal to their proportional holding of all of the total issued ordinary units in the trust. 

What are the other differences between a unit trust that is "fixed" and one that is "non-fixed"?

The differences between the two types of unit trust are:

• the Unit Trust - fixed contains one class of ordinary unitholders, with the same rights to capital and income distributions of the trust in proportion to their unitholdings.
• the Unit Trust - non-fixed gives you the ability to create two classes of unitholders:

          1.      ordinary unitholders, with rights to capital and income distributions of the trust in proportion to their unitholdings; and
          2.      income unitholders who may, at the trustee's absolute discretion, receive distributions of income of the trust. 

Why does it matter if a trust is "fixed" or "non-fixed"?

The trust is "non-fixed" because no unitholder or class of unitholders have a fixed (proportional) entitlement to income of the trust.  This has important implications - for instance unitholders cannot claim a tax deduction on borrowing costs associated with their unitholding.

The new Unit trust - non-fixed costs $137.50 (the same price as the Unit trust - fixed), to find out more click here to view the product page.

Any Questions?

If you have any questions about the new Unit trust - non-fixed, or about any other Cleardocs products, please call 1300 307 343.

To order the new Unit trust - non-fixed click here.