Unit trusts treated as corporate entities

Public trading trusts

Under Division 6C of Part III of the Income Tax Assessment Act 1936 (ITAA 1936), a public trading trust (PTT) must be both:

• a trading trust (broadly, a trust that carries on activities other than holding solely passive investments such as shares, land and fixed interest assets); and
• a public unit trust.

PTTs lodge a company tax return using a company TFN.

Legislative amendments to modify Division 6C in 2016 resulted in some trusts ceasing to be public trading trusts for income years starting on, or after, 1 July 2016 ('affected trusts').

Trustees of these affected trusts must consider the impact of these changes on the trust's registration requirements and tax obligations.

An affected trust will still be treated as a corporate tax entity and lodge a company tax return using its current company TFN for income years on or after 1 July 2016 if it has made a choice, under Subdivision 713-C of the Income Tax Assessment Act 1997, to be the head company of an income tax consolidated group.

See also:

• Transitional rules for trusts that cease to be corporate unit trusts or public trading trusts
• Ceasing to be a public trading trust or a corporate unit trust