SMSF Bare Trust Deeds: Ambiguities, Risks, and Best Practices in Stamping

News | Navjot Kaur | Released: 20/08/2025 | Read: 5 Mins

Frequent Mistakes in SMSF Bare Trust Deeds

Execution errors-

Certain execution errors are critical, particularly when a bare trust deed is signed before the corporate trustee has been legally formed. In such cases, the trust is considered invalid, as there is no legally established trustee to carry out its terms.

 

Outdated SMSF deed-

if an SMSF is operating under an outdated deed that does not include a borrowing power, it may not amount to a breach of the SIS Act. However, it would still be a breach of the fund’s own governing rules.

 

Payments Must Come from the SMSF Account-

Making a payment from a member’s personal account instead of the SMSF’s bank account is not permitted. All fund-related transactions must be made directly from the SMSF’s bank account to maintain compliance and ensure a clear separation of assets.

 

Unidentified plan of property in SMSF-

If your Self-Managed Super Fund (SMSF) owns property, it's crucial to have clear documentation and a plan in place. Operating without one, or with an undocumented plan, can lead to serious compliance issues.

 

Repercussions of Incorrect Execution Date-

 

If the bare trust deed is executed at the wrong time, it may not be accepted for stamping under the intended duty treatment. This can result in the deed being assessed differently by the revenue authority and may lead to higher duty or compliance issues

 

 

Contract Name Requirements for SMSF Bare Trusts (by Jurisdiction)

Alternatively, the buyer’s name can simply be “Holding Trustee Pty Ltd ACN XXX XXX XXX” (as this is what will be registered on the title) without any reference to the bare trust/holding trust; however, please confirm with your solicitor for their preference.

 

QLD, WA and NT purchases should sign their bare trust documents BEFORE the same day as entering into a contract.

Lender Requirements and Contract Issues

Banks and other lenders impose strict conditions on LRBA documentation. Key issues they raise include:

• Trustee Structure: Lenders typically require the SMSF to have a separate corporate trustee, and often a different corporate trustee for the bare trust. If individuals or the same entity acts as a trustee for both trusts (SMSF/ Bare Trusts), many lenders will refuse the loan.
• Importance of Correct Naming: Using the correct purchaser’s name is critical to avoid the transfer being void or attracting double duty. A member or nominee should never be listed as the purchaser.
• Documentation and Registration: Lenders will usually review the bare trust deed before settlement.

When to Date a Bare Trust Deed?

Best Practices:

1. To avoid these pitfalls, seek advice before contract exchange. Ensure the SMSF’s own deed allows the LRBA.
2. Incorporate and execute all trustee companies well in advance.
3. Prepare the bare trust deed with the exact naming and execution date required for the relevant state
4. Coordinate timing: for QLD/NT settle deed by exchange; for NSW/VIC/SA by completion. Always name the purchaser on contracts per state rules (using “trustee for [trust]”).
5. Keep meticulous records showing the SMSF provided funds (to support duty exemptions).
6. By following lender instructions and state requirements, trustees can prevent non‑compliance, double duty, or lender refusal.

Summary Table - Bare Trust Deed Stamping Requirements

Join my webinar on 27th Aug- SMSF Deeds, Sole Purpose & Crypto Explained

How Trustdeed can help?

Get everything done in one place – we set up your bare trust deed and handle the stamping for you too. Fast, simple, and hassle-free! Stamping available in

• NSW ($440) + Govt fees ($750)
• Victoria ($132)

 

Visit www.trustdeed.com.au for more details or call us on(02) 9684 4199

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