What is a unit trust?

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Like slicing up a pizza, a unit trust is one where the assets are held and administered by the trustee of the trust for the holders of units in the unit trust.  Units are usually in equal portions an allocated to an identifiable owner.

In other words, this means that unit trusts pre-determine the unit holders entitlements.  The entitlement may be for income, capital or both?

Unit trusts are often used where unrelated parties run a business together and where the units are then held by a family trust and for managed funds where investors hold units in the trust.

Below is our video tutorial on who to appoint as the trustee of your trust:

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