I'm after some advice from anyone who has changed trustee type. I'm in the process of working through the processes to finally undo what I now consider a mistake and go with the Corporate Trustee I should have had all along for my family SMSF. In addition to the obvious or should I say expected costs of establishing the company, annual ASIC fee and trust update, I'm unhappy to learn that I may face some fees that do little other than in my view waste my money. For example the shares the fund holds, I read online that Commsec may charge about $53 per company held to transfer the name changes. That or delist them from CHESS and go through the share registries who'll apparently charge $50 to change the name for all the shares they register. Then re-list to CHESS and it'll cost much the same. Since some of the shares the fund owns aren't in a position to sell and some are micro caps that are under water (looking at you CCU) it just seems like a huge expense to incur at once, or an annoying capital loss to sell the shares and avoid the name change costs. In terms of bank accounts I know the banks may want to see the new or updated deed and take copies but will they, as I read on one website, want to close and reopen the accounts in the new name rather than rename the accounts. A hassle for employer contributions coming in. Does anyone have any experience to share. In terms of audits, if I don't change the names over within a reasonable amount of time, I presume the auditor will have to report that down the track, bringing unwelcome ATO attention. Has anyone here gone through the same process and have anything to share.
Hi Anglosaxon: Funnily enough 80% of the 500,000 SMSFs are set up as individual trustees. For longevity, asset protection and flexibility we recommend all our clients use a corporate trustee. This also depends on your investment strategy also. For instance if you trade in shares, much easier to use a company, as share holdings will not be effected by adding members to the fund, as they will just be added as directors of the fund. We have a transfer of around 1 fund a fortnight from Esuperfund where we change to Corporate Trustee on the clients behalf. To Change from a individual trustee to corporate trustee, it is fairly simple and happy to run you through this direct by phone or email. This will involve: 1. update to trust deed 2. Set up a Company Trustee, note there are lower ASIC fees for Super Trustees, however will be the $444 for the company set up in the first instance Depending where you are with your SMSF journey and your age, it must be best to make the change now. So you are using Commsec? there is a process to follow in terms of changing the name of shares and if executed correctly, you will not have an issue with audit at all. Hope that helps Cheers, Ivan
Very interesting question and response. Would either of you mind running through the benefits of a Corporate over Individual Trustees? I got the paperwork and there didn't seem to be much point in becoming a corporate trustee just to hold some precious metals so I went with the path of least resistance. What am I missing?
I'm pretty sure I have highlighted the differences and benefits and 'considerations' in another post I have made. Let me dig it up and if I cannot fiind the post I will run through the differences in detail later today. Generally if it just you in the fund, as a sole member, you will have to go Corporate Trustee. EDIT refer post 4 in the link below, happy to provide more detail for you if you like, just shout out if yes http://forums.silverstackers.com/topic-48139-heads-up-e-super-running-a-free-setup-promotion.html Cheers, Ivan
Steps to change from individual trustee to corporate trustee for a Self Managed Super Fund - Trust deed needs to be reviewed to allow the resignation of individual trustees and appointment of corporate trust, generally the trust deed is redrafted to reflect the requirements of a corporate trustee. - Create a new special purpose company, when you set the company ensure it is reflected as a special purpose company to ensure you receive the discounted ASIC Fees. Generally, A Corporate Trustee should be used only for the SMSF .... nothing else - your tax agent will notify the ATO of the change in trustee of the fund from the individual to the corporate trustee - If your purchasing property through an LRBA always use a Corporate trustee - notify the bank of the change and they will change the name for example XXX Pty Ltd ATF XXX Super Fund - for shares, depends on your broker, contact them and obtain advice of any changes needed Hope that helps, if you have any questions let me know. We have our own Trust Deeds for corporate trustee super funds, which are written in plain english and pretty short compared to the others. Companies are easy to set up and if you need help let me know. Hope that helps to provide guidance on moving from individual to corporate trustee. Cheers, Ivan
