Choose individual trustees or a corporate trustee. You should discuss this decision with an SMSF professional. A person is disqualified if they: 1. See full list on ato. As a trustee or director, you must: 1. A legal personal representative can be: 1.
Self-managed super funds 2. Approved education courses 3. Subscribe to SMSF NewsNote: you. An individual trustee structure is generally cheaper to establish and simpler to maintain than a corporate alternative , but offers less flexibility and greater exposure to liabilities. Ultimately your choice of structure should reflect your needs and objectives as well as those of any other members of your SMSF fund.
What is a corporate trustee? Can I appoint a trustee or director? Can corporate trustee have two directors? Should your family trust have a corporate trustee?
Nearly of recently established self-managed superannuation funds operate under an individual trustee structure rather than a corporate trustee arrangement, according to statistics released by the ATO. We examine the pros and cons of each form of trustee. Under an SMSF corporate trustee structure, a company must be set up to act as the trustee of the fund.
Each SMSF fund member must be a director of this company. The company must be registered with the Australian Securities and Investments Commission (ASIC). Ownership of all the SMSF’s assets is listed in the company’s name as the trustee. Neither the corporate trustee nor any of its directors can be paid for the services they provide to the SMSF. All SMSF assets must be kept separate from the.
Under an individual trustee structure for an SMSF, ownership of all the SMSF’s assets is listed in each individual trustee’s name instead (on behalf of the fund). A company is not set up and registered for the purposes of being the fund’s trustee. However, like corporate trustees, individual trustees : 1. Individuals are eligible to be SMSF trustees provided that they: 1. In addition to how an SMSF is set up and how ownership of its assets is recorde there are a number of other key differences between a corporate and individual trustee structure. These differences are outlined below. Every member of an SMSF must be a trustee of their fund.
This means that they are legally responsible for ensuring the fund’s compliance with superannuation and taxation legislation. SMSFs must be set up with either a corporate or individual trustee structure. It’s best to seek independent professional advice about which structure is most appropriate for your individual circumstances.
The information contained in this article is general in nature. If there is a shortfall in the assets of the Trust the individual Trustee will be liable for the shortfall. If the shortfall is significant, this ends up defeating the asset protection benefit of establishing the Trust in the first place. Deciding on the type of SMSF trustee is important. This video will help explain the difference between individual trustees and corporate trustees ? This is troubling as sole-purpose corporate SMSF trustees have been known to be superior for.
Instructions and form for SMSF trustees We strongly recommend you undertake a free trustee education course before reading and signing this declaration. For more information visit ato. Trustee declaration To be completed by new trustees and directors of corporate trustees of self-managed super funds.
Changing to a corporate trustee ? The registration is completely online and can be done in about minutes. It seems most people adopt an individual trustee structure simply because of the cheaper initial cost. The establishment fee is higher where a corporate trustee is involved due to the need to establish and register the company with ASIC.
A corporate trustee , however, should result in a considerable saving of money over the long-term. The ‘ trustee ’ is the person who distributes the trust’s assets to the beneficiaries. A trustee can be either a real person, known as an ‘ individual trustee ’, or a company, known as a ‘ corporate trustee ’. In either case, the trustee must be legally capable of holding trust property in their own right.
Where the trust is established by deed (which in the case of a deceased estate is the will), the trustee must deal with the trust property in line with the intentions of the settlor as set out. The trustee holds the trust property for the benefit of the beneficiaries. The key difference between individual trustees and corporate trustees is how much exposure you are willing to have to risk and responsibility for potential liabilities within the trust, as well as the flexibility afforded for changes in the trust.
Although the latter is the less utilised option, does that mean it is the less wise choice? Succession Where changes to individual trustees occur, if one trustee of a fund passes away for example, the fund will not be able to remain compliant and will not be able to operate as usual in. If a trustee breaches a law, penalties are applied to each member of the fun Colley says. This is a topic that was explored in detail in the article titled Get ready for new ATO penalties. Australian Taxation Office statistics suggest that a large majority of SMSFs have individual trustees.
This covers the main reasons to have a sole purpose corporate trustee. The ‘sole purpose’ indicates that the company only acts in one capacity (as an SMSF trustee).