Before setting up your SMSF, you need to make decisions on what trustee structure you need for your SMSF.
We have written an article to help you understand the benefits and disadvantages of each structure. This article can be found here.
In summary, the corporate trustee will give you more benefits for the following circumstances:
- you want to purchase investment properties in your SMSF. Most SMSF loan lender prefer corporate trustee. Some lenders can lend to SMSFs with individual trustees but the LVR will be normally less than those with corporate trustees.
- SMSF trustees have a detailed succession plan. For husband and wife SMSF with an individual trustee structure, if either of them passes away, the SMSF may be wound up. This may create some undesirable taxation issues of distributing SMSF funds to non-dependent children. The income generated from the death benefits will be taxed at top marginal rate outside of the SMSF.
- if you are the sole member and trustee of the SMSF, you have to use corporate trustee.
Please note our costs for setting up the corporate trustee are $880. It is free of charge to set up an SMSF with individual trustees.