About the Acknowledgement of Trust (already own asset)

Acknowledgment of Trust
If you have already bought the asset (say, for your Super Fund) then use this Acknowledgement of Trust document. (If you are about to buy the asset then use, instead, the Declaration of Trust.)

What is an Acknowledgement of Trust?
A ‘trust’ is merely when someone holds 'something' for you on trust. The ‘something’ may be property, shares or any other asset. Usually when you have an asset you have both the ‘legal’ and ‘beneficial’ interest.

However, with a trust someone has the ‘legal’ ownership. Another person or group has the ‘beneficial’ interest. For example consider Conway Pty Ltd as trustee for the Jon Conway Super Fund. The legal owner is Conway Pty Ltd but the beneficial owner is the Jon Conway Super Fund.
The Trustee already has the asset in their name. At all times the asset has been held beneficially for the beneficiaries. This agreement is to merely acknowledge that the true (beneficial) owners are the beneficiaries.
Warning: Self Managed Superannuation – the Australian Tax Office requires you to have an Acknowledgment of Trust to say that the Trustees hold the property in trust for the Self Managed Super Fund. Start building the document and read the hints on this topic.

So how does the Acknowledgment of Trust work?
Say you purchased property in your Super Fund, but you didn’t do a Declaration of Trust. Now What?

You can’t just go and build a Declaration of Trust. The Trust relationship already exists; building a Declaration of Trust is a resettlement. You will have to pay Stamp Duty and Capital Gains Tax on the transfer.

What you need to do is a Deed that Acknowledges the Trust relationship existed from the date of the purchase.

Why do I need such a document
The media release was issued on 17 June 2005. The ATO gave people who are trustees of SMSFs a “final reminder” that the assets of the fund must be appropriately recorded to show ownership by the fund.

The ATO says that the trustees of SMSFs must ensure that the fund's assets are held in a legally recognised ownership arrangement. This generally means the assets must be held in the name of the trustees on behalf of the fund. In States or Territories where this is not possible, a caveat, instrument or declaration of trust must be executed for the asset.

For a copy of the ATO media release, No Nat 2005/37, 17 June 2005, go to www.ato.gov.au or http://www.ato.gov.au/super/content.asp?doc=/content/60054.htm.

You can start building the document for free. You can read all the hints for free. You can read the summary for free. Only at the end are you invited to actually buy the document.