Many clients ask us for a corporate trustee because they’ve “heard its better.” There are significant differences between corporate and individual trustees, so we don’t want you to rely on, simply, “what you’ve heard.” Here is some solid information, put together by our legal team, to help you out.

There are a lot of reasons for changing to a corporate trustee, including death or the break-down of a marriage.  However, you could also want the change because, quite simply, you want to borrow money from the fund in order to purchase property.  In fact, most of the major lenders require a fund to have a corporate trustee.

The table below outlines the advantages of having a corporate trustee. This might assist in conversations with your fellow trustees, who may not see the value of the additional cost that comes with setting up a company to act as trustee. Check out the ATO’s guidelines for SMSF company trustees.

In most situations, it will be better for an SMSF to have a corporate, rather than individual, trustee. The major disadvantage of a corporate trustee is the up-front cost of establishing the company, but it should be remembered that the ongoing costs of having a corporate trustee are actually very low. However, there are longer-term benefits of having a company, which generally outweigh the extra cost.

Now, let’s look more in depth at both the advantages and disadvantages of corporate and individual trustees:

We can help you with the change from individual to corporate trustee structure. If you would like to discuss your options, you can call us at 02 8114 2290, or email us at admin@sequoia.com.au.

Forget “what you’ve heard,” get your answers today!