Should you use a Corporate Trustee to run your Self Managed Super Fund?

This article is reprinted with permission of the author LawCentral.

As with most things whether you use a corporate trustee to run your self managed superannuation fund entirely depends on your situation. Your accountant is the best person to ask.

A Corporate Trustee is good if you fall into the following categories:

You are secretive and own lots of assets

Don’t want anyone to know what assets you own? A Corporate Trustee holds the assets in the name of the company. If someone does a land titles search using your name, they won’t find the real estate held in your SMSF.

The members of your SMSF change often

Your members are the Trustees. So when a member changes, so do the Trustees. In this instance, you have to go back to the local titles office and transfer the property into the names of the new Trustees. There are generally no state duty or Capital Gains Tax issues to do this. But there are administrative costs to transfer.

You love asset protection strategies

Assets in your SMSF are meant to be conservative – they are there for your retirement – not for speculation.  Risky or not, I have had clients that have ended up with negative assets in their SMSF. Insolvency ensures that the Trustees of the SMSF can go down with the sinking ship.

You pay land tax

In most States you pay a higher rate of land tax the more land you have. Therefore, if you and your wife already have a rental property then owning more land (as Trustee of the SMSF) increases the rate of land tax you pay. You can transfer the land out of your name into the name of your new company – for no transfer duty and no Capital Gains Tax. (Get the help of a tax lawyer.)

Corporate Trustees add expense and complication. Your Accountant is best to do the costs/benefit analysis.

For the definitive arguments for and against a Corporate Trustee visit LawCentral and subscribe for Platinum membership.

Author: Brett Davies

Brett Davies is a guest contributor to The Money Guide. Civic Legal (incorporating Brett Davies Lawyers) has helped clients across Australia for over 16 years. From managing your personal Estate Planning and Business Planning to tackling the ATO in the High Court, Brett Davies Lawyers offers clear and straight forward advice. Civic Legal is a private tax law firm. We only take instructions via your own Lawyer, Accountant or Adviser. http://www.civiclegal.com.au/

2 thoughts on “Should you use a Corporate Trustee to run your Self Managed Super Fund?”

  1. In your last paragraph, “You can transfer the land out of your name into the name of your new company – for no transfer duty and no Capital Gains Tax. (Get the help of a tax lawyer.)”, do you mean you can transfer land as individual trustees to land as corporate trustee? Otherwise, this statement is misleading implying that you can transfer land into a company without CGT or stamp duty.

    1. Hi Jeffrey. That article is written by the specialist tax lawyers at LawCentral and reprinted with their permission. You will need to clarify that point with them, which you can probably do as a member of their Platinum club. (links above).

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