If you choose to have individuals acting as the trustees of your self managed super fund, the fund must have:
• Four members or less
• Each of those members must also be a trustee
• Unless they are related, no member may be employed by the other member
• Trustees are not paid for their role as trustee of
Single member funds and individual trustees
You are permitted to set up a fund with only one member. However, you are still required to have two individual trustees. The member of the fund is one trustee and the other can be either a relative of the member, or any other person who does not employ them. The second trustee need not have a balance in the super fund, and has the same rights and responsibilities as the trustee who is a member of the fund.
Consider carefully when appointing a second person to act as trustee for your single member super fund. The role entails legal rights and responsibilities in relation to the SMSF, the same as the trustee who does have money in the fund so the position is not to be taken lightly. They may also have significant control over your super fund monies in the event of death. The alternative is to set up a corporate trustee and be a sole director and secretary, and this is discussed shortly.
You may choose to incorporate a company to act as
trustee for your SMSF. If so the following is required:
• Fund is to have four members or less
• Each member must also be a director of the a company
• No member is an employee of another member, unless they are related
• Neither the corporate trustee, nor the directors of
the corporate trustee are remunerated for their service
Single member funds and a corporate trustee
The sole member of a SMSF can set up a company to act as the trustee of their super fund. In this instance they do not require an additional person to act as trustee of their fund as they can be the sole director and secretary of the company. This alleviates the risk of involving a second person if you are the sole member of your super fund.
Please note we do not recommend using an existing
company to act as the trustee of your super fund – unless it is available to act solely as the corporate trustee of the super fund and is not used in any other capacity.
The ATO considers that a fund with a corporate trustee with one or more members under the age of 18 will not satisfy the definition of a SMSF in section 17A of the SIS Act unless a legal personal representative has been appointed as a director of the corporate trustee in place of the member who is under age 18.
As an individual is not automatically a legal personal representative of another individual simply because they are the parent or guardian of that individual, in the case of a SMSF with a corporate trustee the parent or guardian will need to go through the formal process of appointing a legal personal representative for minor members.
Once appointed, the legal personal representative must then be appointed as a director of the corporate trustee of the SMSF in place of the member who is under age 18.
ASIC reporting obligations
Tamim Asset Management is not a registered ASIC agent and therefore will not act as the registered address, or handle communication from ASIC on behalf of your corporate trustee. However this can be attended to for a small annual fee.
It is important for people to understand the advantages and disadvantages of each type of trustee structure and be able to apply this knowledge to their individual circumstances.
Too often the direct costs associated with establishing a company to act as the corporate trustee of a SMSF is the overriding reason why individual SMSF trustees are appointed.
The administration, operational and estate planning benefits of a corporate trustee are often not fully identified or considered. While the set up costs of a SMSF with individual trustees will always be less than a SMSF with a corporate trustee, the administration and estate planning complications and costs which may be incurred by the trustees later on also need to be considered. Only once all of these costs have been considered can the most cost effective option truly be identified.
Suite 5, Level 12
220 George Street, Sydney NSW, 2000
1300 750 007
magellen, kosec, clime, wilson, wam, montgomery, platinum, commsec, caledonia, pengana, tamim