Recently we
have had a number of customers enquiring about how to complete a change of
trustee for a single member super fund either to or from a structure with two
individuals as trustee. These customers noticed that upon completing the online
form and clicking ‘Save & Continue’, the interface would alert them to an
error. The error suggested the proposed
structure was legally non-compliant even though it was. If you have a single
member self managed superannuation fund with individual trustees,
superannuation law requires there to be no more (or less) than two trustees. If
the fund has more than two individuals as trustees, then it can no longer be a
single member fund as all trustees are required by law to be members of the
fund also.
When
completing a change of trustee to replace a company with individuals or
vice-versa, you would select ‘1’ for the number of members of the fund. This
prompts the interface to ask who the other trustee is, or if the current
trustee is a company, whether there are any non-member directors of the trustee
company. Before you continue filling out the interface, the ‘SMSF validation check’ will show the
sole member as a ‘Member’ and the other individual will appear as ‘Other
trustee/director (non-member)’.
If you have
a single member fund with 2 individual trustees and you wish to change a
trustee the interface will prevent you from completing the order.Given this limitation
with our interface our recommended approach to complete the order as a two
member fund (as opposed to a single member fund with two trustees). We will then
refer you to our lawyers at Maddocks in order for them to make the necessary
amendments to your deed and other relevant documents in this package. A small
fee may be payable.
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