Tax Savings Strategy 220 | Non-Geared Unit Trust
19 March 2019
Non-geared unit trusts (NGUT) allow taxpayers to co-invest with their SMSF in property. The benefits of the NGUT structure include:
- Enables a SMSF with limited funds to co-invest in large property purchases.
- The SMSF can purchase additional units in the NGUT from related parties (at market value).
- The NGUT has flexibility in issuing and redeeming units.
- Unlike a bare trust, there are no restrictions on undertaking a property development.
- Borrowing costs are lower than for limited recourse borrowing arrangements as the non SMSF members can borrow directly from the bank to purchase units in the unit trust.
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2