Do Unit Trusts Get CGT discount?

Do Unit Trusts Get CGT discount?

Provided that the property has been held for at least 12 months, any capital gain derived on the property by a unit trust would generally qualify for the 50 per cent CGT discount, as long as the gain is not distributed to a company.

How does a JPUT work?

A Jersey Property Unit Trust (JPUT) is a legal structure whereby legal ownership of assets (primarily non-Jersey real estate) is vested in one or more trustees who hold the assets on trust for the benefit of unitholders upon the terms of a written trust instrument.

How is CGT calculated on unit trust?

Calculating the gain CGT on unit trusts and OEICs is calculated using an average cost basis. So if shares/units have been purchased in the same fund on separate dates and at different prices, all purchase costs are added together and then divided by the total holding to arrive at an average cost per unit/share.

What is an exempt property unit trust?

An Exempt Property Unit Trust (EPUT) is an onshore unit trust with stringent restrictions on who can hold units. If it complies with those restrictions, it is generally exempt from tax on income or gains.

What are the disadvantages of unit trust?

What are the disadvantages of unit trusts?

  • Less control – although you can select trusts that align with your investment goals and preferences, you won’t be able to choose the exact assets or ethical investments.
  • Cost – you’ll still have to pay fees, even if the fund performs badly.

Are units in a unit trust an active asset?

Yes. A share in a company or an interest in a trust can qualify as an active asset under subsection 152-40(3) of the Income Tax Assessment Act 1997 (ITAA 1997) if the company or trust owns interests in another entity that satisfies the “80% test” in paragraph 152-40(3)(b) of the ITAA 1997.

Is a JPUT a body corporate?

The structure of a JPUT differs from that of a company because it is not a separate legal entity. Instead, the assets within the JPUT are held by its trustees – who are the legal owners – and the unitholders are the beneficial owners of those assets.

Do Unit trusts have settlors?

Unit Trusts A Standard Unit Trust is a Trust divided into units all of the same class that gives the Unit holders equal rights to vote and share in the distribution of income and capital in proportion to the number of Units held. A Unit Trust does not have a Settlor.

How much tax do I pay on a unit trust?

You invest in a unit trust with after-tax money and then pay tax on interest, dividends and capital gains. Local and foreign interest is taxed at your marginal rate, and both local and foreign dividends are taxed at an effective rate of 20%.

Why is unit trust not good?

The Bad. Investing in unit trusts typically incur higher fees than other investment instruments like Exchange Traded Funds, as you have to pay for the management, marketing, accounting and switching costs of the unit trust.

What is the 15-year rule?

The 15-year exemption allows the vendor to disregard a capital gain arising from a CGT event that happens to an active asset held by the vendor for at least 15 years. If the vendor is a company or trust and distributes this CGT-free amount to its CGT concession stakeholder(s), these distributions will also be exempt.

What is an active asset for CGT purposes?

A CGT asset is an active asset if you own it and: you use it or hold it ready for use in the course of carrying on a business (whether alone or in partnership) it is an intangible asset (for example, goodwill) inherently connected with a business you carry on (whether alone or in partnership).

Does a unit trust have a trustee?

The trustee is normally a shelf company, set up specifically to act for the unit trust. Unitholders appoint the trustee, and their powers are contained within the trust deed. The trustee legally owns the trust and may be held personally liable for any debts incurred whilst as the trustee.

Do unit trusts have Appointors?

Unit Trusts do not have an Appointor. Instead, you generally need a 75% resolution by the unit holders to remove the Trustee.

Can a unit trust distribute a capital loss?

A disadvantage of unit trusts, and trusts in general, is that they cannot distribute losses to the unitholders. Any losses incurred by the unit trust must be carried forward to be offset against future income.

How does HMRC know you have sold a property?

HMRC collects information from multiple sources to make sure you have reported property disposal through your personal self-assessment or through direct reporting. They also have an access to the record to confirm if you have lived in this property or not.

Are unit trusts tax deductible?

Investing in local unit trusts Up to R23 800 of local interest is exempt from tax if you are younger than 65, or up to R34 500 if you are 65 and older. You trigger a capital gain or loss on unit trust investments only once you sell the units (e.g. when you switch between unit trusts or withdraw).