SMSF – Trustee Update
Why a Deed for the SMSF Trustee update?
The SMSF Trustee update is done as a Deed. Minutes are not enough. The Superannuation Industry (Supervision) Act 1993 (Cth) (‘SIS’) is complex.
Our Trustee update includes:
1. updating legislation to allow you remove and change Trustees
2. removing any outgoing trustees
3. adding any new trustees complies with Moss Super Pty Ltd v Hayne [2008] VSC 158
4. confirming any trustees that are remaining
5. reduction of tax clauses for use by the Trustee
6. ensuring that there is no resettlement
7. grandfathering structures and defined benefits
8. augmenting trustee powers to comply with the latest Australian budget
9. dealing with conflict of interest between trustees
10. increasing power of appointment and delegation for the trustees
11. allowing meetings via the Internet and other forms of communication
12. minutes to confirm and accept the Deed of Variation
13. covering letter confirming the above (for accountant’s due diligence file)
The above reduces problems arising from divorce, ATO audit and a trustee’s death. See Katz v Grossman.
What am I building?
In your Self-Managed Superannuation Fund update of your Trustee, you get:
* Deed of Variation, which updates the Trustees of your SMSF
* Minutes of acceptance by the Trustees and Members
* Letter on our law firm’s letterhead confirming the above, signed by a partner of our law firm.
Move from humans to a corporate trustee?
Your Trustee is either a Company or all the members. If the Trustee of your SMSF is a company then all the members are the directors of the company. Or, if you have no company then all the members are trustees. See section 17A SIS Act.
Example: Mavis and John are trustees of their SMSF. By law, they must be the only members.
Example: Futuris Pty Ltd is the trustee of the Futuris SMSF. The members are Karen and Peter. Therefore, by law, the only directors of Futuris Pty Ltd are Karen and Peter.
The SMSF Trustee update allows you to:
1. Remove humans – replace with a company
2. Remove company – replace with humans as trustees
3. Remove humans and replace with humans
4. Remove a company and replace with another company
I have only changed the company name. It is still the same company
Build this document. Put in the old company name and the ABN. The new company name with the same ABN.
A trustee is dead, bankrupt or of unsound mind?
The SMSF Trustee update also updates your Trustees, even if they are dead or otherwise incapacitated.
Have a look at the Sample document. There are many training videos and hints to help you as you build the document.
What about updating the Members?
The Deed of Variation only updates the Trustees. It does not update the members of the Self-Managed Superannuation Fund. Your accountant and financial planner can change the ‘members’ by minute.
For more legal advice telephone us. We are a law firm. We can help you answer the questions.
Adjunct Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, Dip Ed, BArts(Hons), LLM, MBA, SJD
Legal Consolidated Barristers and Solicitors
National law firm specialising in Superannuation and Taxation
Mobile: 0477 796 959
National: 1800 141 612
Direct: 08 6389 0400
Email: [email protected]
Skype: brettkennethdavies
All Self-Managed Superannuation Funds have a ‘name’. They are a nick-name. They have no force of law.
The Trustee name (e.g. Smith Nominees Pty Ltd) is NOT the trust name. The Trustee is just a trustee. Don’t put in the trustee name. Put in the SMSF’s name.
Have a look at the original Trust Deed that set up your SMSF. Your Self-Managed Superannuation Fund is usually called after your name. For example:
1. Smith Self-Managed Super Fund
2. Mary and Colin Firth Superannuation Fund
3. Collins Family Retirement Fund
Because you are building your document directly at a law firm’s website you:
1. retain Legal Professional Privilege
2. benefit from our law firm’s Professional Indemnity Insurance
3. receive legal advice
4. get a letter on our law firm’s letterhead setting out what you have built
Only a law firm can provide the above.
Upon building the SMSF Trustee update, you receive as a PDF:
1. Deed of Variation, which updates completely the Trustees of your SMSF.
2. Minutes for the Trustee to accept the Deed of Variation
Resettlement of an SMSF occurs when a new ‘trust estate’ is created out of an old trust. When this occurs, the trustee is considered to have disposed of the assets in the old trust and accordingly, have created a new trust. This will result in significant tax implications.
Updating your SMSF Trustee update through Legal Consolidated will not result in the resettlement of your SMSF as we retain those parts of the old Deed that are required to not affect a resettlement based on both the legislation and previous court decisions.
The Australian federal government provides generous tax concessions that come from operating a ‘compliant’ self-managed superannuation fund (SMSF). However, it must be compliant. To be compliant:
- Your fund must only ever have a maximum of 4 members at one time. You can have 1, 2, 3 or 4 members.
- Each member must be a trustee. Each trustee must be a member. (Unless you have a company as trustee or unless there are minors as members.)
- Instead of having all the members, as trustees, you can have a company. This is called a corporate trustee. Each member must be a director of the company. Only members can be directors.
- You cannot have someone you employ as a member with you. This is unless that employee is related to you.
- The trustee is a volunteer – a trustee can never draw a salary or fees for performing the job of trustee.
- All members and trustees should be Australian residents, otherwise, you face complexity.
The Deed of Variation that you are building Updates the Trustees.
The rules of your SMSF Deed will not be substantively changed. By building an ‘SMSF Full Replacement’ on our website, you can update the rules of your SMSF Deed so that it complies with up-to-date legislation and regulations. Click here to build an SMSF Full Replacement.
