Widely held unit trust
272-105 Widely held unit trust
Basic meaning
A trust is a widely held unit trust if:
it is a fixed trust that is a unit trust; and
it is not closely held (see subsection (2)).
A trust is also a widely held unit trust if it is an AMIT (including an AMIT arising from the operation of section 276‑20 (Trust with classes of interests—each class treated as separate AMIT)).
Closely held—income test
A trust is closely held if:
an individual has, or up to 20 individuals have between them; or
no individual has, or no individuals have between them;
directly or indirectly and for their own benefit, fixed entitlements to a 75% or greater share of the income of the trust.
Closely held—capital test
A trust is also closely held if:
an individual has, or up to 20 individuals have between them; or
no individual has, or no individuals have between them;
directly or indirectly and for their own benefit, fixed entitlements to a 75% or greater share of the capital of the trust.
Single individual
For the purposes of subsection (2) or (2A), all of the following are taken to be a single individual:
an individual, whether or not the individual holds units in the unit trust; and
the individual’s relatives; and
in relation to any units in respect of which other individuals are nominees of the individual or of the individual’s relatives—those other individuals.
Exception
A unit trust is not a widely held unit trust if, because of:
any provision in the trust instrument, or in any contract, agreement or instrument:
authorising the variation or abrogation of rights attaching to any of the units; or
relating to the conversion, cancellation, extinguishment or redemption of any of the units; or
any contract, agreement, arrangement, option or instrument under which a person has power to acquire any of the units; or
any power, authority or discretion in a person in relation to the rights attaching to any of the units;
it is reasonable to conclude that the rights attaching to any of the units are capable of being varied or abrogated in such a way (even if they are not in fact varied or abrogated in that way) that directly or indirectly the requirement in paragraph (1)(b) would not be satisfied.
This Act’s bill:Second reading speech
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