Newspaper article The Chronicle (Toowoomba, Australia)

Bare Trusts a Good Tool for Shareholders

Newspaper article The Chronicle (Toowoomba, Australia)

Bare Trusts a Good Tool for Shareholders

Article excerpt

UNTIL recently I had never heard of bare trusts, except for politicians using them to hide their ownership of shares (they have to declare them now).

They are now coming into wider use as the structure that property can be purchased under by a self managed super fund that wants to borrow.

The increased use has bought a GST ruling that clarifies if a bare trust is subject to GST.

The ruling also highlights the use of bare trusts.

A bare trust involves one entity (trustee) holding an asset on trust for another (beneficiary).

The trustee only acts at the direction of the beneficiary. The assets are generally real property or shares. Bare trusts can be created in writing or orally.

The legal title is in the name of the trustee, but the real owner is the beneficiary.

Thus for the protection of the beneficiary it is best to have the arrangement in writing.

Bare trusts enable a person to hold assets and do it anonymously.

This can be useful if you do not want competitors or relatives to know what you own.

For self-managed super funds to be able to borrow for property purchases the property will need to be purchased by a bare trust.

The super fund will be the beneficiary of the bare trust and a company needs to be the trustee. …

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