Bare trust could benefit investors
Sophisticated or wholesale investors looking to invest in a small group through one legal entity should consider utilising a bare trust, according to the Fold Legal.
The Fold writer, Lydia Carstensen, said that using a single-investor model through a bare trust would be convenient for investments including shares, options, convertible notes, foreign investments and crypto and digital currencies.
In such a set-up, the assets would be held in the name of a trustee who then holds them legally and on trust for each beneficiary. The trustee would have no say in how the capital or income is distributed, as the beneficiary retains this control.
Carstensen said that costs associated with bare trusts were minimal, with the main outgoing costs being fees, should the trustee be an investment manager, and potentially a one-off stamp duty payment upon establishing the trust.
She warned that, unless the trustee and investment manager holds an Australian financial services licence to provide custodial services, a bare trust could not have more than 20 investors.
AUTHOR
Hannah Wootton
Recommended for you
Ausbil is growing its active ETF range with an ESG product in collaboration with sister company Candriam.
Philanthropic investment group Future Generation’s CEO, Caroline Gurney, will step down from her role at the start of next year.
The newly combined L1 Group is expectant of stabilising Platinum’s falling funds under management within the next 18 months, unveiling four growth pathways and a $330 million equity raise.
Janus Henderson Investors has launched a global small-cap fund for Australian investors, which includes a 5.4 per cent weighting to Australian equities.
