Unit Trust Deed (Fixed Unit Trust) — Australia
(Fixed Unit Trust)
This Unit Trust Deed (the "Deed") is made on [Settlement Date] between:
(1) [Settlor Name], of [Settlor Address] (the "Settlor"); and
(2) [Trustee Name], of [Trustee Address], as [Trustee Type] (the "Trustee").
This Deed is governed by the laws of [Governing State], Australia, and by the applicable provisions of the Income Tax Assessment Act 1936 (Cth) ("ITAA 1936") and the Income Tax Assessment Act 1997 (Cth) ("ITAA 1997") as amended from time to time.
BACKGROUND
A. The Settlor wishes to create a fixed unit trust on the terms set out in this Deed for the benefit of the unit holders from time to time.
B. The Trustee has agreed to act as trustee of the trust and to hold the Trust Fund on the terms of this Deed.
C. The Settlor has transferred to the Trustee the settlement sum of [Settlement Sum] (the "Settlement Sum"), receipt of which the Trustee acknowledges.
1. DEFINITIONS AND INTERPRETATION
1.1 In this Deed, unless the context otherwise requires:
- "Trust" means the trust established by this Deed, known as [Trust Name];
- "Trust Fund" means the Settlement Sum, all units subscribed for by unit holders, all property acquired by the Trustee in the course of administering the Trust, and all income, gains, and accretions thereto;
- "Trustee" means [Trustee Name] and any successor trustee appointed in accordance with this Deed;
- "Unit" means a unit of beneficial interest in the Trust Fund issued under this Deed;
- "Unit Holder" means a person registered in the Unit Holder Register as the holder of one or more Units;
- "Issue Price" means the price at which Units are issued, being [Issue Price Per Unit] per Unit at the date of this Deed (subject to variation by the Trustee);
- "Redemption Price" means the price at which the Trustee redeems Units, being the Net Asset Value of the Trust Fund divided by the total number of Units on issue;
- "Financial Year" means the 12-month period ending 30 June in each year;
- "Net Income" means the net income of the Trust as calculated for income tax purposes under the ITAA 1936 and ITAA 1997;
- "Vesting Date" means [Vesting Date];
- "ATO" means the Australian Taxation Office.
1.2 The Corporations Act 2001 (Cth), the applicable state Trustee Act, the ITAA 1936, and the ITAA 1997 are incorporated into this Deed to the extent applicable.
2. ESTABLISHMENT OF THE TRUST
2.1 The Trustee hereby declares that it holds the Trust Fund upon and subject to the trusts, powers, and provisions of this Deed.
2.2 This Trust is established as a FIXED UNIT TRUST. Each unit holder's beneficial interest in the Trust Fund is proportional to the number of Units they hold as a fraction of the total Units on issue. Unlike a discretionary trust, the Trustee has no discretion to vary the proportions of income or capital distributed to unit holders (except as specifically provided in this Deed).
3. UNITS AND UNIT CLASSES
3.1 The total units in the Trust at the date of this Deed are [Total Initial Units] Units at [Issue Price Per Unit] per Unit.
3.2 UNIT CLASS STRUCTURE: [Unit Class Type]. [Unit Class Description]
3.3 Each Unit of the same class carries equal rights to income, capital, and (where applicable) voting. Units are indivisible.
3.4 The Trustee may, by resolution and subject to the consent of all existing unit holders (or as otherwise provided herein), issue additional Units in the Trust at an Issue Price determined by the Trustee to be the fair market value per Unit at the time of issue.
4. ISSUE AND REDEMPTION OF UNITS
4.1 ISSUE. The Trustee may issue additional Units at an Issue Price determined by the Trustee as equal to the Net Asset Value per Unit at the time of issue (being the total market value of the Trust Fund divided by the number of Units on issue). The Trustee must record new issuances in the Unit Holder Register.
4.2 REDEMPTION. Subject to the Trust having sufficient liquidity, the Trustee may (but is not obliged to) redeem Units held by a Unit Holder at the Redemption Price, being the Net Asset Value per Unit at the date of redemption. Redemption proceeds shall be paid within 30 days of the Trustee accepting a redemption request, subject to the Trust's liquidity and any applicable law.
4.3 A CGT event (E4 or C2) may arise upon redemption of Units, and Unit Holders should obtain tax advice before requesting redemption.
5. TRANSFER OF UNITS
5.1 Subject to clause 6.2 and any restrictions set out in this Deed, a Unit Holder may transfer all or any of their Units to another person by executing a unit transfer form and lodging it with the Trustee.
5.2 The Trustee shall update the Unit Holder Register upon receiving a valid transfer form. Stamp duty on the transfer of Units may be payable under the applicable state revenue legislation, and the transferee is responsible for attending to stamping.
5.3 A transfer of Units is a CGT event for income tax purposes (CGT event A1), and the transferring Unit Holder may be liable for CGT on any capital gain realised. The 50% CGT discount under ITAA 1997 Div. 115 may be available if the Units have been held for more than 12 months.
6. DISTRIBUTION OF INCOME
6.1 The Trustee shall distribute the Net Income of the Trust to Unit Holders in proportion to their unit holdings in each Financial Year, with distribution frequency: [Distribution Frequency].
6.2 Each Unit Holder's share of the Net Income is calculated by multiplying the Trust's Net Income for the Financial Year by the fraction: (Units held by the Unit Holder) ÷ (Total Units on issue) as at 30 June in the relevant Financial Year.
6.3 The Trustee must resolve to distribute income no later than 30 June in each Financial Year. Any undistributed Net Income as at 30 June will be assessed to the Trustee at the highest marginal tax rate under ITAA 1936 s.99A.
6.4 CAPITAL GAINS. Capital gains realised by the Trust will be allocated to Unit Holders in proportion to their unit holdings. The 50% CGT discount under ITAA 1997 Div. 115 may be available to individual or superannuation fund Unit Holders in respect of gains on Trust assets held for more than 12 months. Corporate Unit Holders are not entitled to the CGT discount.
6.5 FRANKED DISTRIBUTIONS. Where the Trust receives franked dividends from Australian resident companies, the attached franking credits will flow through to Unit Holders in proportion to their unit holdings under ITAA 1997 Div. 207.
7. TRUSTEE'S DUTIES AND POWERS
7.1 The Trustee shall hold and administer the Trust Fund in accordance with this Deed and applicable law, and must act honestly and in the best interests of the Unit Holders as a whole.
7.2 In addition to all powers conferred by the applicable state Trustee Act, the Trustee shall have the following powers:
- to invest the Trust Fund in any form of investment applying the prudent person investment standard under the applicable Trustee Act;
- to buy, sell, lease, mortgage, or otherwise deal with any property forming part of the Trust Fund;
- to carry on or invest in any business;
- to borrow money on such terms as the Trustee considers appropriate and to grant security over Trust assets;
- to employ agents, solicitors, accountants, and other advisers and to pay their fees from the Trust Fund;
- to enter into contracts and arrangements on behalf of the Trust;
- to register the Trust for GST, PAYG withholding, and other tax obligations with the ATO;
- to maintain books of account and prepare annual financial statements for the Trust;
- to issue and redeem Units in accordance with this Deed.
7.3 The Trustee is entitled to be indemnified from the Trust Fund against all liabilities, costs, and expenses incurred in the proper administration of the Trust.
8. APPOINTMENT AND RETIREMENT OF TRUSTEE
8.1 The Trustee may be removed and a new Trustee appointed by ordinary resolution of the Unit Holders (more than 50% by units held).
8.2 A Trustee may retire by giving 30 days' written notice to the Unit Holders, provided a successor Trustee is appointed before the retirement takes effect.
8.3 On a change of Trustee, the outgoing Trustee shall execute all documents and do all acts necessary to vest the Trust Fund in the new Trustee without triggering an unnecessary CGT event or stamp duty liability.
9. VESTING
9.1 The Trust shall vest on the Vesting Date, namely [Vesting Date], being a period of no more than 80 years from the Settlement Date as required by the perpetuity legislation of [Governing State].
9.2 On the Vesting Date, the Trustee shall distribute the Trust Fund (including all income and capital) to the Unit Holders in proportion to their unit holdings after payment of all trust liabilities, costs, and expenses.
9.3 A distribution on the Vesting Date may give rise to CGT events and income tax liability for Unit Holders. Tax advice should be obtained in advance of the Vesting Date.
10. DUTY AND TAXES
10.1 STAMP DUTY. This Deed is subject to stamp duty in [Governing State] and must be stamped within the time prescribed by the applicable state revenue legislation. Transfers of Units may also be subject to stamp duty.
10.2 ATO REGISTRATIONS. The Trustee shall apply for a Tax File Number (TFN) and Australian Business Number (ABN) for the Trust with the ATO. The Trustee shall lodge annual Trust Tax Returns (and, where applicable, a Business Activity Statement) with the ATO.
10.3 GST. If the Trust carries on an enterprise and its annual GST turnover meets or exceeds the registration threshold under the A New Tax System (Goods and Services Tax) Act 1999 (Cth), the Trustee must register the Trust for GST.
11. GOVERNING LAW AND PROFESSIONAL ADVICE
11.1 This Deed is governed by the laws of [Governing State], Australia, and applicable Commonwealth income tax legislation.
11.2 IMPORTANT: A unit trust deed has significant and lasting legal and tax consequences. The Trustee and Unit Holders are strongly advised to obtain independent legal advice from a solicitor and tax advice from a registered tax agent before executing this Deed and before making any material changes to the trust structure or unit holdings.
EXECUTED as a deed on [Settlement Date]
SIGNED by the SETTLOR
Full name: [Settlor Name]
Address: [Settlor Address]
Signature: _______________________________
Date: [Settlement Date]
In the presence of:
Witness name: _______________________________
Witness signature: _______________________________
SIGNED by the TRUSTEE
Name: [Trustee Name]
Address: [Trustee Address]
Signature / Authorised Signatory: _______________________________
Date: [Settlement Date]
In the presence of:
Witness name: _______________________________
Witness signature: _______________________________
Settlor
________________
Signature
Date: ________________
Trustee
________________
Signature
Date: ________________
What Is a Unit Trust Deed (Fixed Unit Trust) — Australia?
A Unit Trust Deed (Fixed Unit Trust) in Australia establishes a trust, names the trustee and beneficiaries, and sets the terms on which trust property is held and distributed, with trustee duties governed by the Succession Act 2006 (NSW).
Unit trusts are widely used in Australia for property investment, joint ventures, and structured investment arrangements between parties who require transparent, proportional ownership of assets. The unit trust structure is particularly attractive for property investment because it allows multiple investors to co-own a property in defined proportions, to transfer their proportional interest by way of a unit transfer (subject to stamp duty), and to receive their proportional share of rental income and capital gains each year.
The legal framework for unit trusts in Australia draws from state trustee legislation (which governs the Trustee's powers and duties) and Commonwealth income tax legislation — primarily the Income Tax Assessment Act 1936 (Cth) and the Income Tax Assessment Act 1997 (Cth). A unit trust is not a separate legal entity for income tax purposes — the Trust's net income is calculated at the trust level and flows through to unit holders in proportion to their unit holdings, where it is taxed at each unit holder's own marginal tax rate.
The Trustee must distribute the Trust's net income to unit holders each Financial Year (ending 30 June). Any undistributed net income as at 30 June is assessed to the Trustee at the highest marginal rate under ITAA 1936 s.99A. Franked dividends received by the Trust flow through to unit holders, who can use the attached franking credits to offset their own tax liability. Capital gains realised by the Trust on assets held for more than 12 months are eligible for the 50% CGT discount under ITAA 1997 Div. 115 when distributed to individual or superannuation fund unit holders.
A Unit Trust Deed typically covers: the Settlor who establishes the trust; the Trustee who administers the Trust Fund; the unit classes and their respective rights; the Unit Holder Register; the Issue Price and Redemption Price for units; the mechanics for transferring units; transfer restrictions (where required); the income distribution frequency and mechanism; the capital gains and franking credit flow-through provisions; the Trustee's administrative and investment powers; and the vesting date (maximum 80 years under state perpetuity legislation).
When Do You Need a Unit Trust Deed (Fixed Unit Trust) — Australia?
A Unit Trust Deed is appropriate in a wide range of Australian investment, joint venture, and business structuring situations.
Property investment syndicates commonly use a unit trust structure when two or more investors wish to co-invest in residential or commercial property in defined proportions. The unit trust provides a formal structure for the co-ownership arrangement, clearly documents each investor's proportional interest, and provides a mechanism for one investor to exit by transferring units to the other (subject to stamp duty and any transfer restrictions in the deed).
Joint ventures between unrelated parties often use a unit trust when both parties want transparent, proportional ownership of the joint venture assets, income, and capital. The unit trust's fixed distribution structure confirms each party receives exactly their agreed proportion — unlike a discretionary trust where one party could potentially be disadvantaged by an adverse exercise of the Trustee's discretion.
Superannuation funds investing in property or other assets through a trust structure typically require a fixed trust (a unit trust) rather than a discretionary trust, because superannuation fund trustees must be able to determine each member's entitlement with certainty — a requirement that a discretionary trust cannot satisfy.
Estate planning for complex estates sometimes involves a unit trust holding a family business or investment property, with units distributed among family members or held by the family discretionary trust, providing both asset protection and a clear mechanism for transferring beneficial ownership across generations.
A unit trust is particularly appropriate where investors need to be able to borrow against their interest in the trust (because lenders can take security over specific units), or where the trust's assets will be used with a commercial mortgage (because the fixed, proportional nature of the trust's beneficial interests provides clarity for lenders).
What to Include in Your Unit Trust Deed (Fixed Unit Trust) — Australia
A well-drafted Australian Unit Trust Deed contains several elements that are critical to its legal effectiveness and tax compliance.
The Settlor and settlement sum clause formally establishes the trust by evidencing the initial transfer of property from the Settlor to the Trustee. The Settlor should be an unrelated third party, and the settlement sum should be nominal (e.g., AUD $10) to minimise stamp duty on the establishment of the trust.
The unit class and unit holder provisions define the nature of each unit holder's interest in the Trust Fund. A single class of ordinary units — each carrying equal income and capital rights — is the simplest and most common structure. Multiple unit classes add flexibility but require careful drafting to avoid the trust losing its 'fixed trust' status for income tax purposes, which could affect the availability of the 50% CGT discount and franking credit flow-through.
The Unit Holder Register is a mandatory record of all unit holders and their holdings. It must be kept up to date with every issue, transfer, or redemption of units. In property unit trusts, the register is also important for stamp duty purposes — the ATO and state revenue offices can review the register to confirm ownership history.
The Issue Price and Redemption Price provisions establish how additional units are priced when new investors join the trust, and how the Trustee calculates the buyout price when a unit holder wishes to exit. Market value pricing (net asset value per unit) confirms fairness between incoming and existing unit holders.
The income distribution provisions define how and when the Trustee distributes net income, capital gains, and franked dividends to unit holders. The fixed proportional distribution mechanism — without any Trustee discretion — is the defining feature of a unit trust and must be clearly drafted.
Transfer restrictions are critical in joint venture unit trusts to prevent an investor from selling their units to an unwanted third party without giving the other unit holders a right of pre-emption. These provisions should specify the process, timing, and valuation mechanism for pre-emptive rights.
The vesting date and winding up provisions confirm the trust has a defined end date and a mechanism for orderly distribution of the Trust Fund on termination, which is important for both compliance with perpetuity legislation and for tax planning.
Additional compliance elements for a Unit Trust Deed (Fixed Unit Trust) — Australia used in Australia include: Under state succession legislation — including the Succession Act 2006 (NSW), Wills Act 1997 (Vic), and Succession Act 1981 (Qld) — the Supreme Court of each state administers probate. The Trustee Act 1925 (NSW) and equivalent state Acts govern trustee obligations. The Australian Taxation Office (ATO) administers estate taxation. Section 7 of the Succession Act 2006 (NSW) sets formal requirements for valid wills. The Privacy Act 1988 (Cth) applies to personal data held by executors and administrators. Forms-legal.com provides this template as a starting point for Australia-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Unit Trust Deed (Fixed Unit Trust) — Australia (Australia) [Legal document template]. Forms Legal. https://forms-legal.com/australia/estate-planning/trusts/unit-trust-deed-australia
"Unit Trust Deed (Fixed Unit Trust) — Australia (Australia)." Forms Legal, 2026, https://forms-legal.com/australia/estate-planning/trusts/unit-trust-deed-australia.
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year = {2026},
howpublished = {\url{https://forms-legal.com/australia/estate-planning/trusts/unit-trust-deed-australia}},
note = {Free legal document template. Based on Succession Act 2006 (NSW)}
}Also available for these jurisdictions:
Frequently Asked Questions
A unit trust is a trust in which the beneficial interest is divided into a fixed number of equal 'units' held by unit holders. Each unit holder has a defined, proportional entitlement to income and capital — there is no trustee discretion to vary the proportions. This is the fundamental distinction from a discretionary (family) trust, where the Trustee has absolute discretion to decide who receives income and capital each year and in what amounts. In a unit trust, if you hold 40% of the units, you receive 40% of the net income and 40% of the capital on distribution. This fixed structure makes unit trusts the preferred vehicle for joint ventures, property investment syndicates, and arrangements between unrelated parties where transparent, proportional ownership is essential. Unit trusts are governed by general trust law principles, state trustee legislation, and the Income Tax Assessment Act 1936 (Cth) Division 6.
Stamp duty on the transfer of units in a unit trust varies by state. In NSW, under the Duties Act 1997 (NSW), the transfer of units in a 'land-rich' unit trust (i.e., a trust where 60% or more of the Trust Fund by value consists of NSW land) is treated as a transfer of land and attracts transfer duty on the market value of the underlying land attributable to the units being transferred. In VIC, the Duties Act 2000 (VIC) imposes landholder duty on the acquisition of interests in 'landholders' (including unit trusts with Victorian land holdings above certain thresholds). QLD, WA, and SA have similar 'land-rich' or 'landholder' duty regimes. For unit trusts that do not hold real property, transfer duty generally applies at lower rates or may be exempt. Always obtain stamp duty advice before transferring units, particularly in property unit trusts.
When a unit trust disposes of a CGT asset it has held for more than 12 months, the net capital gain (after applying the 50% CGT discount under Income Tax Assessment Act 1997 Div. 115) flows through to individual and superannuation fund unit holders in proportion to their unit holdings. Corporate unit holders do not access the 50% discount. The Trustee must include the capital gain in the Trust's net income for the relevant Financial Year, and each unit holder includes their proportionate share in their own assessable income. A transfer of units by a unit holder also triggers a CGT event (CGT event A1), and the gain or loss is calculated on the difference between the sale proceeds and the unit holder's cost base. The 50% discount is available to individual unit holders who have held the units for more than 12 months.
Yes. A unit trust deed can provide for multiple classes of units with different rights attaching to each class — for example, Class A units may carry both income and capital rights, while Class B units may carry income rights only. Multiple unit classes provide flexibility for investment structuring, but also add complexity and potential ATO scrutiny. The ATO and the courts have considered whether certain multi-class unit trust structures constitute 'fixed trusts' for the purposes of Income Tax Assessment Act 1936 s.102AG and related provisions. Where the rights of unit holders depend on the exercise of a discretion by the trustee (for example, discretion over which class receives franked dividends), the trust may lose its status as a 'fixed trust' for tax purposes. Legal and tax advice is essential when implementing a multi-class unit trust structure.
A managed investment scheme (MIS) is a collective investment vehicle regulated under Chapter 5C of the Corporations Act 2001 (Cth). A unit trust with two or more members where contributions are pooled and managed as a whole by a responsible entity can constitute a managed investment scheme. If the unit trust meets the definition of a managed investment scheme under s.9 of the Corporations Act and is not otherwise exempt, it must be registered with ASIC if it has more than 20 members (or in certain other circumstances) and must be operated by a responsible entity that holds an Australian Financial Services Licence (AFSL). Most private unit trusts with a small number of related parties (e.g., two investors in a joint venture) do not meet the definition of a managed investment scheme and are not subject to Chapter 5C. If you intend to offer units to the general public or a large number of investors, legal advice on whether an AFSL and ASIC registration are required is essential.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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