Custodian appointment 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 appointment of custodian documents.

Our custodian 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 custodian appointments must be authorised under the governing rules of the fund.

What’s included

• Brief covering letter
• Draft resolutions
• Custodian deed

The documents are $800+GST (softcopy only).

Please email [email protected] to make an 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 custodial arrangements are being contemplated

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 custodian 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.

20 April 2018