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Jason G

Nov 04, 2023

Verifying Property Ownership Under LRBA

in SMSF Technical Forum

To verify ownership of a property, GS 009 says to "Check that each property is owned by the trustee and is correctly and appropriately recorded as an investment of the SMSF."

It lists a contract of sale, or declaration / acknowledgement of trust as examples of documents to confirm who owns the investment.

Would a bare trust deed / custodian trust deed also count towards demonstrating ownership? Such deeds explicitly state who owns the property - the trustee of the bare trust, for the benefit of the SMSF.

Would a title search (Showing bare trustee as owner) + executed bare trust deed, together contitute sufficient appropriate evidence to confirm the property is an investent of the SMSF?

2 comments

Comments (2)

Nov 12, 2023

I also check the COS for the history, just had an audit where it is in the SMSF corporate Trustee ATF the SMSF, no and or nominee which can be used in VIC. Have suggested they seek legal advice as could be quite an issue now. Settled in the 2024 FY so also good to ask for the COS and bare trust deed etc even if they only paid a small deposit in 2023 FY so as to pick up these errors early.

THE AUDITORS INSTITUTE

Nov 07, 2023

Hi Jason

Yes for a Fund with a property that has a LRBA the bare (custody) trust deed should be sighted and a title search performed to confirm ownership by the Fund.

The bare trust deed should refer to the trustee of the Fund on behalf of the Fund as being the beneficial owner of the property. The title will show that the property is in the name of the trustee of the bare trust.

Thanks

The Auditors Institute