atypeoftrust(= alegalarrangementfor giving someonepropertyormoney)in which thepersonwho hascreatedthetrustkeepscontrolof it and has topaytaxon anyincomefrom it
FINANCE
atypeofinvestmenttrust(=companyinvestingin othercompaniesforinvestors)in which eachinvestorownsapartof thecompaniesthey haveinvestedin,accordingto theamountoftheirinvestment
An originator pools together loans and sells them to agrantortrust, which issues classes of securities backed by these loans.
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Agrantortrust, in contrast, grants investors proportional ownership in the underlying securities.
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The termgrantortrustalso has a special meaning in tax law.
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If the grantor maintains control of the trust, thengrantortrustrules will apply.
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It is sometimes also referred to as agrantortrust.
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Unlike other trusts, thegrantortrustcompletely passes through all income tax consequences of transactions inside the trust and the trust itself is a virtual shell.
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Investors in agrantortrusthave a direct interest in the underlying basket of securities, which does not change except to reflect corporate actions such as stock splits and mergers.
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Being grantor trusts, they avoid sale treatment on funding, and remain tax neutral during their existence.
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These examples are from corpora and from sources on the web. Any opinions in the examples do not represent the opinion of the Cambridge Dictionary editors or of Cambridge University Press or its licensors.