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Bare trust documents are required where fund trustees are practically unable to hold legal title to fund assets

By William Fettes ([email protected]), Senior Associate, DBA Lawyers

The starting point at general law is that legal title to fund assets must generally be held in name of the current trustees of the fund.

However, this is not always possible, eg, where an SMSF trustee is unable to hold legal title, and title is instead held by another entity.

The ATO acknowledges this issue on its website (https://www.ato.gov.au/Super/Self-managed-super-funds/ Investing/Ownership-and-protection-of-assets/ QC 23322)

  • Assets unable to be held in fund’s name
  • An unavoidable restriction (such as state law) may prevent your SMSF from holding assets using the fund’s name.
  • If assets cannot be held in the fund’s name, ownership by the fund must be clearly established. You can do this by executing a caveat, or creating an instrument or declaration of trust to enable the fund to assert its ownership.
  • If possible, documents such as sale agreements should be executed in the name of the trustees ‘as trustees for’ the fund.

To ensure that SMSF trustees can readily satisfy this ATO requirement, DBA Lawyers can prepare tailored bare trust documents.

Our bare trust documents seek to ensure that SMSF trustees can assert and prove ownership over fund assets, in accordance with the ATO requirement, where legal title is held by another entity for practical, commercial or for some other reason.

Please note that these bare trust documents must be authorised under the governing rules of the fund.

What’s included?

  • Brief covering letter
  • Draft resolutions
  • Bare trust deed

The documents are $800+GST (softcopy only). Click here to order.

Important notes

The above fee does not include the provision of any advice and other attendances, and we generally recommend that expert advice is sought from an experienced lawyer where bare trust arrangements are being contemplated. In particular, duty advice should be sought for the relevant jurisdiction before any documents are executed where the bare trust is over dutiable property.

If you require any further assistance or advice, DBA Lawyers would be pleased to assist. Please let us know. The above documents are broadly offered on the basis that the asset being acquired and/or held by the bare trust will be located in Australia. We invite you to contact us if the intended asset is located overseas, as there are numerous compliance and other issues that can arise with overseas investments and we may need to revise our fee estimate depending on the specific circumstances.

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Note: DBA Lawyers hold SMSF CPD training at venues all around. For more details or to register, visit www.dbanetwork.com.au or call 03 9092 9400.

For more information regarding how DBA Lawyers can assist in your SMSF practice, visit www.dbalawyers.com.au.

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