From 2015, the ATO is looking to require SMSF’s to structure themselves with a corporate trustee. Experts have argued that doing so will make it easier to acknowledge the owners of assets of the super fund. For example, a couple who are also trustees of a fund may be confused as to whether the asset belongs to the fund or to them jointly.

For the ATO, as the regulating body, having corporate trustees will provide another set of rules such as the Corporations Law and the common law to help govern the management of the funds. Also, the government will always welcome additional fees to ASIC needed to establish and maintain a corporate trustee.

There’s also a positive cost saving advantage for corporate trustees when compared to individual trustees. For example, in asset ownership. Individual trustees should all appear and be signatories to any acquisition of a property. When someone in the fund leave or someone new comes in, the ATO should be notified of it. The costs associated with processing of new documents can soon add up.

Since only the corporate name appears in the document of ownership under the corporate trustee structure, any change in the individual members does not require a change in ownership document.

Cost saving is also true in fines and penalties should your fund break any super law.

Under the individual trustee structure, each and every one of the trustee is to be levied the same amount of penalty. So if a penalty to an offense is $10,200 and there are four trustees. That is a whopping $40,800 in total.

Meanwhile, the corporate trustee is treated as one entity (regardless of how many members) and so the penalty will only be $10,200. The directors divides this cost between them.

It is always a good idea to discuss your options, advantages and disadvantages with your SMSF advisor.

If you are looking to setup an SMSF fund, change the structure or need advice in general, call PJT Accountants office or book a no obligation consultation for free.