What is required to be in the Trust Deed?

 

In light of Colonial Case, PCG 2016/16, the Trust Deed should contain the following provisions: 

  • The trustee cannot create different rights or different classes of units;
  • All units on issue must have the same rights to receive income and capital of the trust;
  • Units must be allocated for market value;
  • All income and capital of the trust must be distributed in proportion to the unit holdings, i.e. there is no discretion held by the trustee;
  • Partly paid units cannot be issued;
  • The trust deed requires all unit holders to agree on the redemption of units and any redemption must be at market value;
  • All valuations must be carried out by a valuer in accordance with the applicable ‘Australian Accounting principles’;
  • The trustee cannot make gifts;
  • The unanimous consent of all unit holders is required to vary the trust deed and the variation power should prohibit amendments to any of the above provisions
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