Establishment costs

The fund can be cheaper to establish as you do not have to set up a separate company to act as trustee.

To set up a company, ASIC charges:

• a fee to register a corporate trustee
• an annual review fee.

Governing rules

Trustees must follow the rules in:

• the fund’s trust deed
• the super laws
• the tax laws.

Directors must follow the rules in:

• the fund’s trust deed
• the super laws
• the tax laws
• the company’s constitution
• the Corporations Act 2001.

Directors of a corporate trustee must obtain a director identification number (director ID) before registering the SMSF. Visit the Australian Business Registry Services to apply for a director ID.

Administration and reporting

Fewer reporting obligations and can be easier to administer. However, changing trustees can mean more paperwork and administrative costs.

While there are some extra reporting obligations to ASIC, it’s easier to:

• administer the ownership of fund assets
• keep fund assets separate from any personal or business assets.

Trustee succession

If your fund has 2 trustees and one leaves or dies, action must be taken so the SMSF can continue. You must:

• appoint another trustee in their place, or
• change to a corporate trustee structure so the fund can continue to be an SMSF.

If the trustees change, you must notify the ATO within 28 days.

The corporate trustee doesn’t change if a director leaves or dies. It can operate with just one director. If the directors change, you need to notify the ATO and ASIC within 28 days.

Ownership of fund assets

Fund assets must be held in the name of the fund or the names of the individual trustees, ‘as trustees for’ the fund. If the trustees change, you must change the name in each asset’s ownership document. This can be costly and time-consuming.

Fund assets must be held in the name of the fund or the name of the company ‘as trustee for’ the fund. If the directors change, the corporate trustee doesn’t change, so the titles of the fund assets are unchanged.