Ah. I wasn't sure. I don't have mine yet, so I don't know what is in them.
IP owned by Super via company used for instalment warrant
- Thread starter Roomer
- Start date
Ah. I wasn't sure. I don't have mine yet, so I don't know what is in them.
Hi Perthguy,
If you want to see a trust deed I'll shoot you a 'copy' of one with borrowing powers. Extremely long, but can point you in the right direction.
Cheers, Ivan
My original situation involved having the accountant changing the bank he used for dealing with LRCB after I had signed the contract, such that I was obliged to go down this more expensive path as I was relying on his superior knowledge in how these loans worked and the "water tightness" of the documents as otherwise I'd be left in the lurch ( as opposed to being tricked into using his bank) . At the time, I went through the documents thoroughly , so much so that I had to return some of the docs back to him for corrections due to the numerous errors listed therein ( and this is from a "reputable" accountant who has appeared in these forums). Unlike Redwood's clients I did not enjoy a thorough one on one regarding these aspects, and as has been pointed out, all the custodian trust says is that it must be transferred. Quite innocuous, nothing to suggest it was a big deal.
So even now, it stills seems this last leg appears to be a dark art, in that there have been plenty of warnings about seeking a lawyer and having things done properly but no laymans description of what actually will occur to effect this task.
Whereas at beginning of this thread I had thought it was a case of it just being a possible omission by the bank or it was to be simple matter of a title transfer ( given the simplistic clause in the custodian trust) it would be nice to understand what my fee to the professionals who will be undertaking this task actually involves. Eg some sort minute is prepared by accountant, custodian trust is vested or is it dead upon payment of loan, lawyer/ conveyancer does title transfer .etc
From his post, I think Perth Guy would be of the same opinion and I also think those people contemplating using such warrants would be interested in understanding the whole picture and likely all up costs.
It seems that by having this knowledge, you would be able to be confident in the person to whom you are engaging to do this task. Ie you would know that they actually know what they are doing. Sadly and to my cost, I have had experiences where I have relied upon a professiona's "superior" knowledge only to find their knowledge was not that superior after all.
BTW thanks New York for the link, I haven't had a chance to explore but it looks useful.
So even now, it stills seems this last leg appears to be a dark art, in that there have been plenty of warnings about seeking a lawyer and having things done properly but no laymans description of what actually will occur to effect this task.
Whereas at beginning of this thread I had thought it was a case of it just being a possible omission by the bank or it was to be simple matter of a title transfer ( given the simplistic clause in the custodian trust) it would be nice to understand what my fee to the professionals who will be undertaking this task actually involves. Eg some sort minute is prepared by accountant, custodian trust is vested or is it dead upon payment of loan, lawyer/ conveyancer does title transfer .etc
From his post, I think Perth Guy would be of the same opinion and I also think those people contemplating using such warrants would be interested in understanding the whole picture and likely all up costs.
It seems that by having this knowledge, you would be able to be confident in the person to whom you are engaging to do this task. Ie you would know that they actually know what they are doing. Sadly and to my cost, I have had experiences where I have relied upon a professiona's "superior" knowledge only to find their knowledge was not that superior after all.
BTW thanks New York for the link, I haven't had a chance to explore but it looks useful.
The deed would need to be followed. The SMSF Trustee would write to the Custodian trustee asking for the property to be transferred back into its name. The transfer forms would be sign and 'settlement' would occur with the SMSF custodian handing over the title deeds to the SMSF fund. The transfer will need to be stamped by the OSR and the relevant stamp duty paid. once the transfer is registered the title is in the name of the SMSF trustee.
That would be great! Thanks.
Spot on Roomer. I do want to know in detail what happens at the end... before I sign up! If the set up is wrong, my fund can end up paying stamp duty twice which is something I want to avoid. Your post indicates I still have more to learn!
Further to this:
"SMSF will acquire the Property from the Security Custodian
Trust
Importantly under the above arrangement the SMSF must have
a right to acquire legal ownership of the Property from the Security
Custodian Trust by making agreed installment payments
after the Property is purchased. Practically this means that under
the above arrangement the SMSF will acquire the Property
from the Security Custodian Trust through a series of agreed
installment payments which typically mean that the SMSF will
make an initial upfront payment of part of the Property Purchase
Price (eg deposit). In turn the SMSF will repay the Lender in
Installments until the asset is repaid in full. Once the Loan is
repaid the Property Title will transfer from the Security Custodian
Trustee Company to the Trustee for your SMSF. The ATO
has confirmed that no Stamp Duty of Capital Gains Tax will be
payable as a result of this transfer."
from http://esuperfund.com.au/Libraries/WebsitePDF/7_Property.sflb.ashx
In simple terms (which may be missing some steps) assuming you are in South Australia... this is the process as I understand it.
1. the bank has to discharge the mortgage by completing a discharge of mortgage document. Once this has been lodged and processed it will remove the mortage from the certificate of title of the property.
2. a memorandum of transfer needs to be completed to transfer the certificate of title from the security trust to the SMSF trust
3. the memorandum of transfer needs to taken to Revenue SA for stamping. Nominal stamp duty may apply
4. the discharge of mortgage document and the memorandum of transfer are lodged with the Land Services Group and Lands Titles Office along with the appropriate fees.
Once they forms are processed, the certificate of title will transfer from the Security trust to the SMSF trust and the mortage will be removed from the certificate of title. The SMSF trust will now own the mortgate free property! w00t!
A Conveyancer should be able to arrange all of this for you and advise as to how much the registration fees are.
http://sa.gov.au/subject/Housing,+p...ses/Information+guides/The+settlement+process
1. the bank has to discharge the mortgage by completing a discharge of mortgage document. Once this has been lodged and processed it will remove the mortage from the certificate of title of the property.
2. a memorandum of transfer needs to be completed to transfer the certificate of title from the security trust to the SMSF trust
3. the memorandum of transfer needs to taken to Revenue SA for stamping. Nominal stamp duty may apply
4. the discharge of mortgage document and the memorandum of transfer are lodged with the Land Services Group and Lands Titles Office along with the appropriate fees.
Once they forms are processed, the certificate of title will transfer from the Security trust to the SMSF trust and the mortage will be removed from the certificate of title. The SMSF trust will now own the mortgate free property! w00t!
A Conveyancer should be able to arrange all of this for you and advise as to how much the registration fees are.
http://sa.gov.au/subject/Housing,+p...ses/Information+guides/The+settlement+process
That bold bit is misleading. There may be no CGT for a properly set up custodian trust arrangement.
But the ATO has no jurisdiction over stamp duty and they would not have made such a bold statement. (bold and bold?)
What does stamp duty of capital gains tax even mean? (direct quote). The next section says:
"Repayment of Loan to Lender
On the repayment of the Loan to the Lender, the Property purchased
can be transferred from the Security Custodian Trust
to the SMSF. Based on current legislation and assuming the
above arrangement has been correctly implemented, the transfer
will not be subject to CGT and nominal Stamp Duty will apply."
So it is likely that nominal stamp duty will apply to the transfer (depending on which state I guess). Who knows what they mean by stamp duty of capital gains tax.
I know... lol
The next part says: "can be transferred" but doesn't say how. But it's funnier when it says the: "Property Title will transfer from the Security Custodian Trustee Company to the Trustee for your SMSF" like it's automatic.
To be clear, it should say the property title may be transferred from the...
The reason it is may is because you can actually sell it once it is paid off without transferring it to the SMSF trust. Or can you only do that if the Security Trust deed allows for it? Now I'm confused again
... well some hope for future customers - refer the bank's response received today;
"I have been advised that once the loan has been repaid it is up to the customer to transfer the Title from the security custodian to the SMSF itself. This can be completed by a conveyancer or direct via the Land Title Office. I have advised the relevant area that this vital information should have be provided to customers upon repayment of loans (as per your feedback) and they have advised they will take this on board.
Thank you for taking the time to provide us with valuable feedback."
"I have been advised that once the loan has been repaid it is up to the customer to transfer the Title from the security custodian to the SMSF itself. This can be completed by a conveyancer or direct via the Land Title Office. I have advised the relevant area that this vital information should have be provided to customers upon repayment of loans (as per your feedback) and they have advised they will take this on board.
Thank you for taking the time to provide us with valuable feedback."
I did indeed Mr W, but only after changing accountants.
It was simply a matter of going to a competent accountant who knew of these matters. Unlike the previous accountant who was unable to help , this one supplied me with the relevant paperwork that I needed and for which I could just go and do the title transfer myself. (I contacted the Land Titles office who furnished me with the relevant paperwork and actually knew what I was wanting to achieve.) Guidance from a knowledgeable accountant in this instance was essential
It was simply a matter of going to a competent accountant who knew of these matters. Unlike the previous accountant who was unable to help , this one supplied me with the relevant paperwork that I needed and for which I could just go and do the title transfer myself. (I contacted the Land Titles office who furnished me with the relevant paperwork and actually knew what I was wanting to achieve.) Guidance from a knowledgeable accountant in this instance was essential
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