Income Trust


DEFINITION of 'Income Trust'

An investment trust that holds income-producing assets and trades units like a stock on an echange. Income trusts attempt to hold assets which will generate a steady flow of income, such as lease payments from an office building. The income is passed on to the unit holders.

BREAKING DOWN 'Income Trust'

Income trusts give out a high portion of profits to unit holders in a similar way dividends are given out by companies. Because the cash goes directly to holders, after some costs, income trusts have some tax advantages, such as avoiding double taxation. Some of the most popular income trusts are real estate investment trusts (REITs) and natural resource trusts. The main attraction of income trusts is their ability to generate constant cash flows for investors.

  1. Real Estate Investment Trust - ...

    A REIT is a type of security that invests in real estate through ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out ...
  3. Income Participating Security - ...

    A security that comprises a common share and a high-yield bond ...
  4. Specified Investment Flow-Through ...

    A tax implemented by the Canadian government on the distributions ...
  5. Unitholder

    An investor who owns one or more units in an investment trust. ...
  6. Royalty

    A payment to an owner for the use of property, especially patents, ...
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