Whether your SMSF is to have individual trustees or a corporate trustee is the first question to be answered in setting your SMSF. We hope our analysis below can help you in making this decision.
Benefits of Having Individual Trustees
- No costs to establish. We provide free setup for a SMSF with individual trustees.
- Less costs to run your SMSF. There is no ASIC review forms and review fees every year.
Benefits of Having a Corporate Trustee
- Easy to Make Changes for your SMSF
If new members join the SMSF or existing member leave the fund, there is no need to update the trust deed, report the changes to the regulator and transfer all the assets held by the super fund into the new trustee(s) name.
If you want to borrow from the bank to buy properties or other investments, normally they require the SMSF has a corporate trustee.
- Single Member Funds
If you have a company as the trustee, you can set up a DIY super that you are the only member. The advantage is that you have full control over the running of the super fund. Otherwise you have to make another person as the trustee and join you in making decisions on managing your SMSF.
- Succession Issues
In the circumstances of death or incapacity of the super fund members, a corporate trustee still have full control of the fund. The control of the trustee company also can be passed in line with deceased members’ estate planning goals.
- Reduced trustee litigation exposure
Where the trustee of a fund is subject to litigation, the corporate trustee normally provides additional protection by limiting liability to the assets of the company not those of the underlying directors.
Cost of Set up and having a Corporate Trustee
iCare Super charges an upfront fee of $880 (including GST) to incorporate your trustee
company and $220 for the ASIC annual return.
Can I Change the Trustee for my SMSF from Individuals to Corporate
Yes, you can. But like we discussed above, you need to update the trust deed, report the changes to ATO, relative asset registries etc. If you decide or have to change the trustee structure, we are right here to help you. Please contact iCare Super to discuss in details.