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Questions & Answers - Trustees

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+ What is a Trustee?

The Trustees control the SMSF and make Investment decisions for the SMSF. When you establish an SMSF you have a choice of whether to appoint Individual Trustees or a Company Trustee to act for your SMSF. Each option is detailed below. It is important to understand that the SMSF Trustees do not own the SMSF Assets but are responsible for administering the SMSF which includes:

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    Maintaining all records of the SMSF (noting ESUPERFUND maintain most records electronically)
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    Establishing the SMSF Investment Strategy (noting a Standard Strategy is provided by ESUPERFUND)
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    Complying with all regulations under Super Laws (detailed in our Learn Section)
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    Lodging Tax and Regulatory Returns (attended to by ESUPERFUND)

Further details about the roles and responsibilities of Trustees can be found in the ATO publication "Role and Responsibilities of Trustees".

+ Who can you appoint as a Trustee?

You can appoint either Individuals as SMSF Trustees or a Company as a Trustee. Each is discussed in turn:

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    Option1: Individual Trustees
    Under the ESUPERFUND Platform where an SMSF has individual Trustees, it can have a Minimum of 2 Individual Trustees and a Maximum of 4 Individual Trustees. The Individual Trustees will be responsible for running the SMSF. Almost anyone over 18 can be a Trustee of an SMSF including a spouse, adult child or friends. It is FREE to appoint Individual Trustees for an SMSF.
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    Option 2: Company Trustee
    Alternatively you may select a Company to act as a Trustee for your SMSF. In this case the Members of the SMSF will need to be the Directors of the Company Trustee. The Directors of the Company Trustee will be responsible for running the SMSF. For your convenience, if you do not have an existing Company and would like to establish a Company to act as Trustee for your SMSF, ESUPERFUND offers a Company Setup Service as part of its online SMSF Application here. The cost of establishing a Company with ESUPERFUND is . In addition where the sole purpose of the Company is to act as Trustee for an SMSF (for a "special purpose") the annual ASIC review fee is reduced to per annum compared to per annum for a Company that is not a "special purpose" company. There is no additional annual fee payable to ESUPERFUND to manage the Company. Please note that you are not obligated to use the ESUPERFUND Company Setup Service and can arrange to setup a Company with any provider desired. The Company details can in turn be entered into our online application when applying for an SMSF here.
+ When would I use a Company as a Trustee?

There is a cost to setup the Company of and an ongoing ASIC fee of approximately . We have detailed below some situations clients elect to use a Company as the Trustee of their SMSF. For most clients the situations below are not material enough to justify the additional expense of using a Company as Trustee. But the choice is ultimately yours.

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    1 - You only have One Person
    There are times where a client only wants to establish an SMSF for one person and does not want a second Individual Trustee. In this instance the only option is to establish a Company to act as Trustee for the SMSF. The sole person will in turn be the sole Director and Shareholder of the Company.
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    2 - You are worried about what happens when a Trustee leaves the SMSF or dies
    If you have Individual Trustees and one Trustee leaves the SMSF or dies you cannot continue the SMSF with only one Individual Trustee. To avoid this issue some clients setup a Company to act as their SMSF Trustee. However this is unnecessary because if you have two Individual Trustees and one person leaves or dies you can appoint a new Individual Trustee who is over 18 (eg. child, friend, parent, spouse etc.) at that time. Alternatively if you are left with one Individual Trustee and cannot find a second Individual Trustee, you can appoint a Company Trustee at that time and the SMSF can continue in the normal way.
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    3 - Avoiding the need to update Account Names
    When you add or remove Trustees in your SMSF, you must update all the accounts that the SMSF has. Accordingly if you have Individual Trustees and a Trustee is added or removed then the Broker Account, Transaction Bank Account and all other accounts the SMSF has, must be updated with the details of the new Trustee. This is not necessary with a Company Trustee as the Company always remains as the Trustee even if the underlying Directors and Shareholders of the Company change.
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    4 - Some lenders will only lend to SMSFs with a corporate trustee
    Certain SMSF lenders will only lend to SMSFs established with a corporate trustee.
+ What if I only want one person in the SMSF?

It is a legislative requirement that where an SMSF has individual Trustees, it must have a minimum of 2 Individual Trustees. Almost anyone can be a Trustee of an SMSF including a spouse, adult child, parents and friends as long as they over 18. If you cannot find a second adult Trustee or you have decided you do not want a second adult Trustee involved in the SMSF and you solely wish to be the SMSF Trustee then the only option is to establish a Company to act as Trustee for the SMSF. You will in turn be the sole Director and Shareholder of the Company.

+ How do I establish a Company Trustee?

For your convenience, if you do not have an existing Company and would like to establish a Company to act as Trustee for your SMSF, ESUPERFUND offers a Company Setup Service as part of its online SMSF Application here. The cost of establishing a Company with ESUPERFUND is . In addition where the sole purpose of the Company is to act as Trustee for an SMSF (for a "special purpose") the annual ASIC review fee is reduced to per annum compared to per annum for a Company that is not a "special purpose" company. There is no additional annual fee payable to ESUPERFUND to manage the Company. Please note that you are not obligated to use the ESUPERFUND Company Setup Service and can arrange to setup a Company with any provider desired. The Company details can in turn be entered into our online application when applying for an SMSF here.

+ Can I use an existing established Company as the SMSF Trustee?

Yes. If you have an existing established Company you can nominate this Company to be the Trustee of the SMSF. This Company can also undertake other activities. We do however recommend you seek advice as to whether using an existing established Company is appropriate to act as Trustee for your SMSF.

+ Does the Trustee Company have to lodge any documentation each year?

No. If the Company only acts as Trustee for the SMSF it is not required to prepare or lodge a Tax Return annually. Accordingly there are no additional compliance fees associated with a Trustee Company other than the annual ASIC Review Fee of approximately if its sole activity is to act as Trustee for the SMSF.

+ Can I reimburse myself for the Company Setup Fee?

Yes provided the corporate trustee is a special purpose company established and maintained with the sole function of acting as the Trustee of your SMSF. In this case, it is reasonable to treat the expenses of setting up the Company as expenses incurred by the SMSF in producing assessable income since the existence of a Company is one of the key components of establishing your SMSF with a corporate trustee. The cost of establishing a Company (if you have not already done so) with ESUPERFUND is which is predominantly an establishment fee payable to ASIC. However the expense will not be tax deductible to the SMSF.

+ Who can be a Trustee of an SMSF?

Anyone 18 years or over can be a Trustee of an SMSF as long as they are not under a legal disability (such as mental incapacity) or a disqualified person.

A person is disqualified if they:

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    have been convicted of an offence involving dishonesty
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    have been subject to a civil penalty order under the super laws
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    are insolvent under administration (including being an undischarged bankrupt)
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    have been disqualified by a court or regulator (for example, by us or APRA).

A Company can't be a Trustee if:

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    a director or other responsible officer of the Company (such as a secretary or executive officer) is a disqualified person
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    a receiver, official manager or provisional liquidator has been appointed to the company action has started to wind up the Company.
+ How do I Add or Remove Trustees?

Once your SMSF is established and the Trustees are appointed there are circumstances where you may need to add or remove the Trustees. For more information on Change of Trustee, please click here.

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General Advice Warning

No Advice Express or Implied: The contents of this website are of a general nature only and have not been prepared to take into account any particular investor's objectives, financial situation or particular needs. ESUPERFUND does not provide financial product advice or recommend any financial products either expressly or implied. ESUPERFUND expressly states that it does not recommend, represent as suitable, or endorse any financial product or service available through ESUPERFUND. This applies equally to those financial products which are established for your SMSF when you become a client of ESUPERFUND. Any information provided in relation to any financial product or service available through ESUPERFUND is factual information only about the operation of the account and how data is made available to ESUPERFUND. Where this website refers to a particular financial product then you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the PDS before making any decision about whether to acquire the product. We also recommend that you should seek professional advice (see below) from a financial adviser before making any decision to purchase any financial product referred to on this website. While the sources for the material are considered reliable, responsibility is not accepted for any inaccuracies, errors or omissions.

Seek Professional Advice from a Financial Adviser: ESUPERFUND is a no advice model and does not provide financial, legal or tax advice to clients. We recommend that you seek appropriate professional advice in view of your personal circumstances. A licensed financial adviser will consider your personal situation and make a recommendation suitable to your financial needs. All information detailed on our website is purely factual and is general in nature. Accordingly, you should not rely on it. It should always be remembered that Trustees are legally responsible for all the decisions made even if you obtain advice from a Financial Planner. Whilst a Financial Professional can provide advice and assistance you are ultimately responsible for the Fund.

Fees: Fees relating to operating your SMSF with ESUPERFUND are detailed on our fee page here. When setting up a SMSF it is important to understand that additional fees may apply that must be carefully considered prior to making a decision to setup a SMSF including an ATO Supervisory Levy, Company Trustee Setup Fee (where applicable), and Investment Fees.