Corporate Trustee

Corporate Trusteeship means having a Company rather than an individual as the Trustee of your SMSF. This type of Company is known as a ‘Special Purpose Company’ because its only purpose is to act as a Trustee of an SMSF.

According to ATO statistics, the Trustees of around 80% of all SMSFs are individuals. Superannuation Warehouse’s default position is to establish new SMSFs with Individual Trustees.

This being said, Superannuation Warehouse can set up your SMSF with a Corporate Trustee if you wish. The major disadvantage of a Corporate Trustee is the upfront cost of establishing the Company. Further pros and cons are set out below.

Advantages of using a Corporate Trustee

  • If there’s only one Trustee, (i.e. no individual Trustees are involved), use the Corporate Trustee structure
  • If there is a change of Trustee you are obliged only to change Directors in the Company. You don’t have to change the Trust Deed for the Trustees (although the Trust Deed may still have to be amended if the Beneficiaries change)

Disadvantages of using a Corporate Trustee

  • Higher set-up fees
  • There is an annual fee of $46 payable to ASIC for maintenance of this entity (you can pay this from the SMSF)
  • Due to this extra legal structure, no extra protection is offered to SMSF assets

Changing from Individual to a Corporate Trustee

It is relatively straightforward to change Trustees without affecting the SMSF. You can go from Individual Trustees to a Corporate Trustee and vice versa. When purchasing property, the banks may require a Corporate Trustee.

To execute a change in Trusteeship from Individual to Corporate, you must complete a Minutes Change of Trustee as well as a Trustee Consent. The new Trustees will also need to sign a new Trustee Declaration in their capacity as Trustees of a corporate entity (click on the links to download these documents).

Fees

Apart from the initial set-up fees, Superannuation Warehouse does not charge a fee to maintain the Corporate Trustee. This is included in the fixed annual fee. Superannuation Warehouse will also be appointed as tax agent for the Corporate Trustee and prepare the annual return documents.

The ASIC annual review fee (fee payable to ASIC) for the Corporate Trustee increases to $46 from 1 July 2015. For details of the ASIC fee changes from 1 July 2015, please see here.

Single Member Funds

A single member SMSF with a Corporate Trustee allows the sole Member to be the only Director of the Company and have full control over the running of the SMSF. If the SMSF had Individual Trustees, another individual would be required to act as a second Trustee and assist in the running of the SMSF.
Lastly, you need a Corporate Trustee structure if you want to add property to your SMSF later on. The Corporate Trustee of a Bare Trust cannot also be the Corporate Trustee of an SMSF.

  • Justin

    Are there any restrictions on who/what can be shareholders of the corporate trustee of the SMSF? I am in the process of establishing a family trust and so was wondering whether that trust could hold all shares in the corporate trustee of the SMSF (or if indeed there is any real
    benefit in it doing so if it was permitted)? Any advice appreciated!

    • superannuationwarehouse

      Justin,
      All Members of an SMSF should be Directors of the Corporate Trustee. If you want to use the same company to act as Trustee of a Trust or run a business from it, yes you can do this.
      Be mindful that the special ASIC fee exemption for an SMSF dedicated Corporate Trustee would not apply if the entity is used for other purposes as well.
      On your last comment noting the Trust will hold shares in the corporate trustee – this is not usually done as a Trustee Company does not own any shares in the trust, it act as Trustee only, not an investor. The Directors will each hold a token amount of shares, say $10 each.
      Trust this answers your question.

  • Jason Nissen

    I have a query regarding setting up SMSF with corporate trustee.
    Can I use an existing company, with ACN, ABN and TFN as the corporate trustee?

    • superannuationwarehouse

      Jason,

      The answer is YES on the basis:
      1. Each Member of the SMSF is a Director of the Company
      2. Each Director of the Company is a Member in the SMSF

      In addition to the above, be mindful that if its an operating company, say you run a business through it, you have to remove it as Corporate Trustee from the SMSF if you sell the business or if the company goes bankrupt.

      If you use an existing company we will obviously not charge you to set up a Corporate Trustee, as the Corporate Trustee is in existence already. On the application page, follow the link as if you set up with an individual Trustee and then add the Company details in the notes section. To get past the requirements for a second individual on the online application, just repeat your name if the intention is to add yourself as the only Member in the Fund.

      Lastly, remember we will give you a call to discuss before we action the SMSF setup with the Tax Office to ensure all the details are correct. So no dramas if you do make a typo on the online form or want to discuss in more details.

      Keep well,

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We are Melbourne based with clients throughout Australia. Our SMSF administration service is mostly paperless. This enable us to charge a fair fee, resulting in a good value-proposition for you.

No Advice

Superannuation Warehouse is an accounting firm and do not provide financial advice. All information provided has being prepared without taking into account of the Trustees’ objectives, financial situation or needs. Because of that, Trustees are advised to consider their own circumstances before engaging our services.