In a Self Managed Super Fund (SMSF), a Bare Trust is often used to borrow money to purchase assets such as a property. The Trustee of the bare trust becomes the legal owner of the asset until the loan is paid off. The asset then gets transferred to the SMSF at the super fund trustee’s request. The SMSF enjoys the beneficiary ownership of the property.
The trustee of Bare Trust has no active duties other than holding the legal title of the asset. The purpose of a Bare Trust is to allow borrowing, broaden investment options, and in the meantime maintain the risk associated with borrowings. The SMSF declares the income and capital of the trust property and gains potential tax savings in a concessional environment.
While offering significant control and tailored investment strategies. Professional advice is often sought to navigate the complexities of SMSF management and maximize retirement benefits.
For the details of what is SMSF, please refer to our other blog SMSF in A Nutshell.
Beyond Taxation & Business Services are specialized SMSF accountants who can guide you through SMSF compliance and maximize tax savings. To book an obligation-free consultation meeting, please click on https://calendly.com/beyond-joy/smsf-accounting-consultatio
