What Is A Unit Trust?

A unit trust scheme is defined in the Stamp Duties Act 1976 as meaning "any arrangements made for the purpose, or having the effect, of providing, for persons having funds available for investment, facilities for the participation by them as beneficiaries under a trust, in profits or income arising from the acquisition, holding, management or disposal of any property whatsoever", and "unit" means, in relation to a unit trust scheme, a right or interest (whether described as a unit, as a sub-unit, or otherwise) or a beneficiary under the trust instrument. Differences in tax treatment of returns and greater freedom of procedures including those to redeem units can render the unit trust a preferred vehicle over a mutual fund. While the latter is strictly bound by Companies Act, there is no legislative regime for unit trusts at present in Bermuda. This leaves room for the introduction of considerable flexibility and innovation in the Trust Deed for both public and private or restricted