QUESTION: When I established my Self Managed Super Fund I recall that being faced with the decision of whether to have a company as trustee or have each member of my fund act as trustee.
I opted for the company as trustee. As a consequence, all assets held in my Super Fund are in the name of the company.
In a recent discussion with my wise accountant, the administration issues and operating costs of my company as trustee were discussed. My accountant suggested that the administration costs of my fund could be reduced if I changed the trustee. He suggested that I remove the company as trustee and replace the trustee with me and my wife.
Fewer administration issues and reduced operation costs - I jumped at the idea to update my trustee. My wife and I assumed the position as trustee and we quickly transferred the funds assets out of the company's name and into our names. I thought this was all we had to do.
I again recently met up with my accountant and he stated that I had to formerly document the change of trustees. Is this the case? If so, how do you update?
ANSWER: In future, best to speak with your accountant before you do something. You currently have a non-complying fund which the Auditor may need to report to the ATO. Your accountant is correct you need to document by deed the change in trustees. I suggest that today you go to LawCentral www.lawcentral.com.au, and generate the Update Trustees and Members Deed. It takes about 7 minutes and it is quite painless. Next to each question there are free hints if you need help. This short and easy to understand deed:
gets rid of members
adds new members
updates trustees
As you will see, the Update Trustees and Members Deed also allows you to document any changes in the members of your fund (so you can update both trustees and members in the same document).
You then can bring the breach to the notice of the Auditor, but with the facts that you have rectified the breach.
Want to know more:
SMSF -- Update Trustees and Members
Product Disclosure Statement
PDS Technical Paper
Self Managed Superannuation Fund Deed
Build a Company
Tax Lawyers on Superannuation
Related Bulletin Bookshelf Stories
Super Fund sacks its Company as Trustee
Changing Members in a Self Managed Super Fund
SMSF - Appoint New Member
New Trustee disclosure requirements for Self Managed Super Funds
Self Manager Super Funds -- Who should be the trustee?
Do all Self Managed Super Funds need a PDS?
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