SMSF Trustee Structure

Aside from control, one of the major advantages of setting up your own Self Managed Super Fund is that you are also a trustee of your fund. During set up, you need to choose what type of trustee you will go for together with the other members. Did you know there are two types of SMSF trustee structures you can choose from?

Let’s take a look at the two types of SMSF trustee structure available to you.

Individual Trustee

Often a SMSF will consist of a Husband/Wife and potentially children. Every member of the fund must be a Trustee.

Where there is a single member fund, there must be at least 2 individuals to act as trustees on behalf of the fund. In this scenario, the Member must appoint a second person to act as trustee, or consider a company to act as trustee.

The trustees are legally responsible to make decisions on behalf of the fund and ensure the fund remains compliant at all times. As individual trustees, you effectively hold the assets of the fund in your name on behalf of the fund.

For instance, Jason Smith & Jenny Smith as Trustees for Smith Superannuation Fund

Corporate Trustee

A company is often utilised to act as a trustee when there is a single member fund (e.g. an individual wants to be the sole signatory/decision maker and member of the fund and does not have anybody willing to act as the 2nd trustee). A company is established with the member of the super fund acting as a Director of the company.

A Company Trustee may also be preferred by SMSF trustees for ease of administration.

There are additional costs associated with setting up a company and additional paperwork, which should be discussed with an Investment Adviser when deciding on your SMSF trustee structure.

Common Characteristics

Whatever structure you choose, there are certain characteristics responsibilities that are common to both individual trustees and corporate trustees. This includes –

  • All members play an active role in the SMSF.
  • There are only four or less members of the fund.
  • For a single member fund, there should be one trustee or director of a corporate trustee who is not a member.
  • No member is an employee of another member unless they are related.
  • Trustees or directors of a corporate trustee are not paid for their duties and services.

For more information regarding selecting your Trustee structure, CLICK HERE

Who can be a Member/Trustee of an SMSF?

Essentially, anyone 18 years of age and over, who is not under a legal disability, can be a trustee of a superannuation fund, unless they are a disqualified person. An individual is a disqualified person if they:

  • Have ever been convicted of an offence involving dishonesty;
  • Have ever been subject to a civil penalty order under the SIS Act;
  • Are insolvent under administration;
  • Are an undischarged bankrupt or;
  • Have been disqualified by the regulator.

What do you do with your existing super?

Balances in existing superannuation accounts can transfer to your SMSF, by requesting a ‘roll-over form’. The funds are then paid to your SMSF bank account and available for you to invest.

Can you contribute extra amounts to your SMSF?

Yes you can. Many SMSF members utilise the SMSF as a savings vehicle due to the tax effectiveness of the structure. However, there are limits that you can contribute to your fund and specific rules and regulations apply so you should discuss with an Investment Adviser.