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SMSF cautioned on trustee status
Self-managed super funds (SMSFs) should appoint a company as corporate trustee rather than the SMSF owner to shield them from tax liabilities and penalties, according to CooperGraceWard law partner Scott Hay-Bartlem.
Hay-Bartlem told delegates at the Small Independent Superannuation Funds Association conference that if an SMSF is made non-compliant and it has a corporate trustee, if there is no money in the fund, then the trustee will be liable for any Australian Taxation Office tax assessment and not the SMSF owner.
Normally, any tax assessment is paid for from the fund.
Recent court cases demonstrated that it was much safer for SMSFs to make a company the corporate trustee rather than letting the owner of the SMSF do it, he said.
There are also limitations on individual trustees on how they can vote, and much fewer limitations and more options of who can have the power in a company structure.
Directors can have different powers, and people can have differential voting rights, giving one person more control over the fund than you can have as an individual trustee, Hay-Bartlem said.
Individual trustees have to act jointly, whereas the directors can act by majority, he said.
However, SMSF members had to be careful with some deeds that automatically impose differential voting rights, Hay-Bartlem warned.
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