A corporate trustee structure is more expensive to establish and maintain. The company established as the corporate trustee of an SMSF will require a company constitution and certificate of registration as well as pay an annual re-registration fee ($56 if purely a ‘superannuation trustee company’ increasing to $276 if it has other operations).
A corporate trustee structure may be appropriate if:
- The members are likely to change – an SMSF set up with a corporate trustee structure can add a member (e.g. a spouse or child) or remove a member (e.g. if a member dies or can no longer act as trustee) more easily than an individual trustee structure;
- It is a single member fund – an SMSF set up with a corporate trustee can have a single member and director. This also means that if one member of a two-member fund passes away, the fund may continue to satisfy the trustee structure rules;
- You are intending to borrow to purchase property – some banks may only lend to an SMSF if a corporate trustee structure is in place; or
- Require peace of mind around personal liability – as a director of a corporate trustee, personal liability is generally limited to the assets held within the SMSF. An individual trustee arrangement does not provide this security and members’ personal assets may be subject to liability claims.
A corporate trustee may be the preferred structure if you:
- Are seeking reduced liability;
- Are considering borrowing money within your SMSF;
- Are likely to have a change of members within the fund;
- Would like clear separation of the SMSF’s investments from personal assets; or
- Want to be the sole director and sole member of the fund.