Trust and "contract name"

Discussion in 'Legal Issues' started by Nominees, 2nd May, 2003.

  1. Nominees

    Nominees Member

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    Hello,

    I spoke with my lawyer yesterday and I am not sure whether what he is saying is right. Can someone confirm.

    I have a trustee company, which is trustee for an investment trust (hybrid).

    When I purchased a block of land he said that we only had to put the company name on the contract.

    He said that there is really no way people can tell it belongs to the trust except they ask me.

    This doesn't sound right. I thought we could put something like this on the contrat : "Such and such company Pty Ltd as trustee for the investment trust"

    What do you pleoples do?

    Thanks

    Nominees
     
  2. DaleGG

    DaleGG Member

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    Hi

    Your lawyer is right.

    Dale

     
  3. Nominees

    Nominees Member

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    OK thanks Dale,

    So even on the title deed the name will only be the "company name" and not "trustee for the invesment trust"?

    This is all very strange. It woud mean that if a company is trustee for two or three different trusts, and buys a property as trustee for trust1 it can then change it to trust2 later on.

    OK this might have its advantages but is it legal?, and if it isn't who can tell that a property was "transferred" from one trust to another?

    Hmmmmmmm ....
     
  4. DaleGG

    DaleGG Member

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    Hi

    THat's right, the title documents will only show the name of the trustee.

    It is common enough for the one company to be trustee of more than one trust and so the scenario you mention is indeed possible. If this is the case, it is common for the trust's own internal documents (such as minutes, contracts, and accounting statements) to reflect which trust owns which property.

    Whilst the stamp duty's office might not pick up on the transfer between trusts, the tax office will notice and will ask questions about CGT.

    Not worth the risk!!!!

    Dale

     
  5. sunnywan

    sunnywan Member

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    The reason for this is a trust is not a legal entity, so the lands office does not allow the trust name even to be mentioned on the transfer. I DO however put the full "company ATF trust" on the front page of contracts. There is no problem with this, and is the best indicator to the ATO that the purchase was indeed under that particular trust.

    My front page of contract is my proof!
     
  6. Simon H

    Simon H Member

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    .........................................................................................................
    So even on the title deed the name will only be the "company name" and not "trustee for the invesment trust"?
    .........................................................................................................


    The same applies to a superannuation fund (NSW).

    Regards
    Simon H
     
  7. Simon H

    Simon H Member

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    Hi Sunnywan

    .........................................................................................................
    The reason for this is a trust is not a legal entity, so the lands office does not allow the trust name even to be mentioned on the transfer. I DO however put the full "company ATF trust" on the front page of contracts. There is no problem with this, and is the best indicator to the ATO that the purchase was indeed under that particular trust.

    My front page of contract is my proof!
    .........................................................................................................

    Good idea Sunnywan.

    Another idea is to still write "company ATF trust" on the transfer document as well as the contract of sale and then rule through it (transfer document only).

    You would then get the change verified by the Office of State Revenue (when paying the stamp duty) this way even though the information is not shown on the register, anybody obtaining a copy of the transfer can see what the original intention is.

    Hope this makes sense.

    Regards Simon H


    ;)
     
    Last edited: 5th May, 2003
  8. paulzag

    paulzag Member

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    If you keep good records like minutes of meetings you don't need the additional proof of front pages of contracts.

    Furthermore I find puting ATF xxx Trust takes too long to explain. The conveyancer, financier and account know it, why advertise?
     
  9. Peter Noake

    Peter Noake Member

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    I'd be interested to hear some views from people in Queensland about the name to be listed on the transfer documents for purchases made into a Trust.

    I have been informed by my solicitor in Queensland that I MUST put "XYZ Pty Limited ATF The Bloggs Family Trust" on the transfer document. This seems to be different to the experiences of those in NSW.

    I have questioned the Solicitor, but he assures me that he teaches RE Law in QLD and that he is correct.

    Any takers?

    Pete
     
  10. strangep

    strangep Member

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    Hi Pete

    I too have been advised that the name should be written as Company X Pty Ltd as trustee for The X Family Trust. I was even advised not to use ...ATF... but to use the full wording.

    Maybe it's just a Queensland thing...... :D

    Cheers

    Paul
     
  11. NickM

    NickM Member

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    A prudent approach would be to try and have it ATF on the contract.

    It is essential in any circumstances to have your minutes/ resolutions reflecting the purchase.

    Nick M
     
  12. Ross Sondergeld

    Ross Sondergeld Member

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    ATF

    Hi...


    ****... it took me 3 month to open a bank account

    "Lifestyle 8 Pty Ltd ATF Sondergeld Discretionary Trust"

    It sure is a pain in the butt trying to explain it to people...

    I wish my solicitor gave me an instruction manual on how to open a bank account, and how to purchase things (i.e. do I have to put the entire company ATF trust every time... ?)


    Ross Sondergeld
    Ross for Property
    Buy. Sell. Invest.
     
  13. strangep

    strangep Member

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    Hi Ross

    We're in the same boat.....so far it's been 6 weeks to open an account with St George. They don't seem to have any idea about the procedure required to open an account with their own bank where a trust is involved!! :mad:

    They've also taken over 30 days to approve our loan :mad::mad:

    Sorry for going off topic......had to vent some frustration...

    Cheers

    Paul
     
  14. Nominees

    Nominees Member

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    Hi Strangep,

    If you have a trustee company, you would be better opening a business account in the company name and then calling the account "xyz Pty Ltd ATF zyx trust".

    It is true that some bank clerks have no idea what they are doing. Make sure you are speaking with some that knows what you want.

    Nominees
     
  15. strangep

    strangep Member

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    Hi Nom

    That's exactly what we have done but it seems like a bit of a curly one for them.

    We've had lost paperwork, incorrect advice, communication issues....overall, I'm really disappointed with the service. I've also just been advised that they've now had our loan application for over 30 days and still no approval!!!

    If I wasn't committed to go through with the process, I'd have pulled the pin long ago and gone elsewhere. I wouldn't recommend them to anyone.


    Cheers

    Paul
     
  16. NickM

    NickM Member

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    Guys
    I cant see the problem.

    I provide an instruction sheet to my clients making it quite clear on what they need to do to open an account.

    I quite often deal with the bank on behalf of my clients to ensure the account is opened correctly.

    I personally have never had a problem as i too have a hybrid trust.

    Make sure you give them a copy of the trust deed !

    CHeers
    NickM