Holding / Bare Trust FAQs

Below are frequently asked questions relating to holding /bare trusts.

Can a holding / bare trust be re-used? 

Our partnered legal provider recommends against amending a holding/bare trust deed for another property and instead suggests establishing a new holding trust, unless the circumstances warrant an amendment (e.g. where a street address changes post registration of the plan, but there is no change in the property held).

Can I have more than one property in a holding / bare trust?

No. The SIS Act specifies that there must be a single asset per borrowing. This refers to a single "acquirable asset" or a collection of assets which are identical and hold the same market value. The in-house asset exemption for Limited Recourse Borrowing Arrangements (LRBAs) is dependent upon the asset being the only property of the holding / bare trust. 

How do I vest a holding / bare trust? 

A bare trust does not ordinarily need to be "vested" because, technically, once the property transfers out the bare trust ceases to exist (i.e. there must be property held for that trust in order for the bare trust to exist). If, however, you would prefer a "formal document" to record the "vesting" of the trust, then please utilise our "Vesting of a Discretionary Trust" document form and add legal review (scoped) to your order. Ensure that you specify your instructions for the solicitor in the Notes (i.e. to adjust the document so that it suits the vesting of a holding/bare trust), and attach a signed copy of the holding/bare Trust Deed. Our legal services provider will then confirm whether the service, in your specific circumstances, can fit within this scope of legal service. 

Can the corporate holding / bare trust trustee be a trustee for other trusts?

Yes. As long as you are meeting all of the relevant legislative requirements, a corporate trustee can be the holding / bare trust trustee for another holding trust, or multiple holding trusts at the same time. 

When might someone opt for purchasing a holding / bare trust on its own without the LRBA? 

Some professionals might look to purchasing just the NowInfinity Holding / Bare Trust Deed as a stand-alone product because they are able to draft the loan documents themselves, in accordance with the relevant rules and legislation, but not the related Deed. However, for most of our clients, the LRBA suite generally tends to be more appropriate or convenient as it includes the Holding Trust Deed and LRBA documents, such as the loan agreement, minutes and a checklist.

Outside of this "LRBA" context, some clients may prefer the relatively simple holding/bare trust structure as a means to achieving a certain objective. For example, a bare trust could be used to hold property for the benefit of another when a specified condition is met, like when a child beneficiary reaches a certain age. If you require a holding/bare trust for this purpose, reach out to legal@nowinfinity.com.au and our legal services provider can assist with a custom deed on a fee-for-service basis. 

"Holding" versus "Bare" trust?

Our service 'SMSF Holding Trust' is in name only, and is only called differently to a bare trust to align with the naming convention applied by the ATO

This does not, however, divert its character from the actual deed template (which has been reviewed by our partnered legal provider) as a bare trust arrangement in line with the LRBA rules under the SIS Act. 


Further information

Limited Recourse Borrowing Arrangement (LRBA) and Holding/ Bare Trusts 

How to Access the Limited Recourse Borrowing Arrangement (LRBA) Suite on NowInfinity

Unknown fields in Holding Trust or LRBA Suite

Disclaimer: You acknowledge and agree that our Services and Materials do not constitute or contain personal or general advice for the purpose of the Corporations Act 2001 (Cth) and that we, our employees and advisers do not offer any legal, accounting, tax or other professional advice or services in connection with the provision of our Services and any Materials.



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