If my UT portfolio comprising mainly equities is up 30% (40k), do I take profit and reinvest in multi-assets portfolios as equity markets seem to be over heated? How does rebalancing work?

If u think it is overvalued then u can trim but selling some units, not the whole position. Rebalancing is reverting back to your original allocation. So let's say ur portfolio is half in UT one and half in UT two. If UT one grow more than UT two, the allocation will be higher too. So maybe 60 to 40. So you sell some of UT one and use the money to buy some UT two so that it becomes back to 50 to 50