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An SMSF is a legal entity that must abide by the requirements of the Superannuation Industry Supervision (SIS) Act, and comply with tax law. All SMSFs are regulated by the Australian Taxation Office (ATO). While this can sound intimidating, most SMSFs have two members, invest most of their portfolio in cash and Australian shares, and easily meet their compliance obligations. If your scenario is a little bit out of the ordinary, it is always best to seek advice from an SMSF specialist before proceeding.
Essentially anyone can be a member of an SMSF provided they:
A disqualified person is someone who:
An SMSF can have up to four members; most funds have two members. Common examples are a couple (eg a husband and wife or same sex couple) and two people who are in business together.
Each member needs to be either an 'individual trustee' of the fund or a director of a trustee company, which is known as a 'corporate trustee'.
You can be an individual trustee if you are a member of the fund and so long as you are not a 'disqualified person' and are not:
Which companies can be a corporate trustee?
Most companies can be used as a corporate trustee provided:
You could use an existing company, however, it's worth thinking about having a separate corporate trustee for your SMSF. This helps keep your SMSF's assets separate from your other assets, as required by law.
Also, because directors of the corporate trustee must generally also be members of the SMSF (with some exceptions), another existing company may have directors who will not be SMSF members.
A corporate trustee can offer a number of benefits including:
The cost of establishing and running a corporate trustee may not be significant if a suitable company is already available. However, if a new company is established, the additional costs can include:
Find out more about our SMSF Establishment Service, including corporate trustee establishment, from Heffron SMSF Solutions.
You should consider seeking professional advice or guidance when deciding on the best superannuation solution for you. It is recommended that you also seek advice from a registered tax agent to determine the tax implications for you. NAB is not a registered tax agent and the tax information contained on this website should not be relied upon to determine your personal tax obligations.
We're giving you the tools you need to get you started with your SMSF: