CCH Trust Accounts
Equalisation
This document explains the mechanism of equalisation payments in unit trusts, which compensates for discrepancies in distributions among unit holders based on their holding periods. It outlines how unit trust units are purchased directly from the trust, with an increased purchase price reflecting accrued income. The distribution is uniform for all holders, but Group II holders receive part of it as an equalisation payment. Technical details on recording equalisation in Trust Accounts and CGT implications are also provided, highlighting its manual entry and potential accounting considerations.