There are many reasons why using a corporate trustee is better for your Self Managed Super Fund than individual trustees. The cost of registering a company far outweighs the savings which might be made, the convenience which would be achieved and the personal liability protection which results by using a corporate trustee for an SMSF.
What is involved in converting from individual trustee to corporate trustee for a SMSF?
There are several issues a trustee will need to look into when attempting this transition.
The Trust Deed
The trust deed is the first port of call with any action you wish to take with your SMSF, so you need to make sure your SMSF’s trust deed permits the use of a corporate trustee. If it doesn’t, you will need to update your deed to allow corporate trustee. If it does, follow the rules in the deed for the resignation of the individual trustees and the appointment of the corporation.
Create and Register a Company
It is always best to use a company specially created to be your SMSF trustee only. You should avoid using an existing company such as your own business or the trustee of your family trust. This is due to problems that can arise when super fund assets become linked with family trust or business assets, and it can become difficult to verify which entity owns which asset.
Once the trustee change has been made, you will need to inform the Australian Tax Office as soon as possible.
Change the asset titles for SMSF investments
Once the trustee change has been made, all the assets owned by the SMSF will require the titles changed to reflect the new corporate trustee. For example, account names on bank accounts, holder name on share registries and brokers and real estate property titles will require an amendment.
- Bank accounts: Before you can make any changes to the account name, most banks will require to see the resignation of the individual trustees and the appointment of the corporation. They may also request company’s certificate of registration.
- Share registries and brokers: Most of these will have similar requirements to your bank, however some brokers insist that your individual trustee account be closed and a new account be opened for the corporation.
- Real Estate: In most states no or a nominal stamp duty will be payable, but you will need to prove to your State Government’s Revenue Office that there has been no change to the beneficial owner of the asset. This task must be completed by a solicitor.
How Superhelp can Help
Superhelp can help you in setting up a corporate trustee for your SMSF.
Please call us for more information on 1300 736 453
The information contained in the article may not be appropriate to your individual needs therefore you should seek personal financial advice before making any financial or investment decisions.