Practicalities involved in running own SMSF

[Julia]

Jorgon, can you tell us the cost of the package for changing to Corporate Trustee?

Does that price include providing the necessary documentation to the ATO?

 

[jorgon]

Hi Julia
I assume this would be done by keeping the existing registered fund but using a new trust deed (which in my opinion is much better than amending the old one).
I would have to write a new step-by-step guide explaining the process to follow since the one in the existing "SMSF set up pack using corporate trustee" is to set up a new fund. I am happy to do this if there is any demand for this.
The cost would be the same as the existing "SMSF set up pack using corporate trustee" which is $365 including gst. There would also be the one-off ASIC fee of $426 to register the corporate trustee as a company.
Although there is no more money to pay, these costs do not include the work involved in lodging the paperwork with the ATO and with the ASIC.
Of course, you would not do this without appreciating any capital gains tax implications.

 

[Julia]

Although there is no more money to pay, these costs do not include the work involved in lodging the paperwork with the ATO and with the ASIC.

Thank you, jorgon. It's the total cost I was looking for, i.e. including your time.
And, as mentioned previously, including the cost of advising the ATO.

 

[jorgon]

Hi Julia
The only work I can do is:-
(a) prepare the documents for you;
(b) provide a step-by-step guide as to the procedure you will need to follow.
The reason is that unlike solicitors, barristers are not allowed to conduct a client's affairs. Barristers in this context are allowed to draft documents for clients and to advise them.
This means therefore there really is no more money to pay. But it also means that you yourself would have to take responsibility to do the paperwork, by following my step-by-step guide. This is actually quite simple. Why pay someone else to do it when you can perfectly well do it yourself (albeit with some guidance)?

 

[awg]

Hi Jorgon & others, excellent to have an Industry professional onboard, and thankyou for taking the time to clarify matters

Julia & others, with regard to the questions you are asking about changing to Corporate Trustee, have you rung Esuperfund ?

I am sure they will give you obligation free opinion, and are remarkably cheap and easy.

It is possible their is easier or cheaper ways to run a Corporate Trustee, I have looked at a few setups, things are getting more competitive that are close, but for $700 setup, audit & tax for a Corp Trust, they do a large number.

No association other than satisfied customer, a phone call is simple (an accountant calls you back later)

Knowing what I know now, I probably would not want to be making changes to my super structure unless compelling reasons presented themselves.

 

[Julia]

Hi Julia
The only work I can do is:-
(a) prepare the documents for you;
(b) provide a step-by-step guide as to the procedure you will need to follow.
The reason is that unlike solicitors, barristers are not allowed to conduct a client's affairs. Barristers in this context are allowed to draft documents for clients and to advise them.
This means therefore there really is no more money to pay. But it also means that you yourself would have to take responsibility to do the paperwork, by following my step-by-step guide. This is actually quite simple. Why pay someone else to do it when you can perfectly well do it yourself (albeit with some guidance)?

Ah, of course. Thanks, jorgon. I should have realised that.

Hi Jorgon & others, excellent to have an Industry professional onboard, and thankyou for taking the time to clarify matters

Julia & others, with regard to the questions you are asking about changing to Corporate Trustee, have you rung Esuperfund ?

The last time I was considering the change, I did contact them but they advised categorically they were not interested in helping with existing funds, only setting up from scratch.
That was a few years ago and they may well have adjusted their approach.

Knowing what I know now, I probably would not want to be making changes to my super structure unless compelling reasons presented themselves.

Couldn't agree more. As I've said recently, I've completed the change to corporate trustee.
(With apologies, jorgon, my query to you was essentially just an ongoing curiosity about the variation in charges, and I thank you sincerely for your courteous response.)

I had quotes from several organisations and these varied widely on cost.
In the end I didn't feel confident about going with generic documents unless these were checked with relevance to my particular circumstances by a solicitor.
I found a local firm with the relevant experience and was happier to sit across the desk and discuss the whole thing, then have to just do the "sign here" bit.

The cost was more than reasonable and significantly less than some of the organisations quoted for just emailing the documents.

I've done the lodging of the form for the ATO with some help over the phone from them to ensure I filled it out correctly.

The most arduous aspect has been the form filling and supply of certified documents for all the financial institutions, negotiating term deposit rate to equate that on original TD which had to be broken because of the change of trustee.
Easiest part was Etrade who essentially did it all over the phone and just emailed me the forms for signature.

It has all been much more complicated than the original set up of the SF.

 

[village idiot]

having now downloaded the pack from jorgon, i will now be bogging down this thread with stupid and pedantic questions during the whole epic process;

question 1. suppose your name was Hogwarts for example, and you called your super fund Hogwarts Super Fund. Is there any disadvantage known to calling the trustee "HSF Trustee PL" as opposed to 'Hogwarts Super Fund Trustee PL'?

Like does it make it harder to open an account with IB or anyone ese because it doesnt have 'super fund' in it?

 

[Julia]

question 1. suppose your name was Hogwarts for example, and you called your super fund Hogwarts Super Fund. Is there any disadvantage known to calling the trustee "HSF Trustee PL" as opposed to 'Hogwarts Super Fund Trustee PL'?

I found the name of the trustee company was eventually determined by what names were available. You don't want it to be any longer than it has to be, obviously, as it can be very tedious when you're completing forms by hand.

e.g. I wanted just "JW Pty Ltd." but that was unavailable and I had to add another couple of letters to acquire the sole purpose company.

I can't see why any broker or financial institution would have any interest whatsoever in what you actually call the Pty. company.

 

[village idiot]

First, some information; If you are setting up a company to act as the corporate trustee, it turns out a company cannot have the words 'trust' or 'trustee' in it's name, so the correct answer to

Is there any disadvantage known to calling the trustee "HSF Trustee PL

is the disadvantage is that the application will get rejected two weeks later and you have to start all over again calling it something else



now a question. Jorgon feel free to chime in here;


If a member at some stage wishes to resign, what are the practicalities of extricating that member and their funds from the SMSF while ensuring it remains a qualifying SMSF at all times?

If a member resigns as a member they must simultaneously reisgn as a director of the corp trustee, otherwise the fund will breach the rule that each director must be a member and each member must be a director. That however would leave their funds still in the SMSF , and presumably still invested, at least for a short period while the investments could be unwound and the balance transferred out to some other super fund. During this time the remaining director would effectively be in control of someone elses funds who is not even a member, which would probably breach numerous regulations.

Could they make the decisions about unwinding the investments, calculating the amount due to the departing member and paying it out of the fund on their own?

Is the answer that the departing member's share of investments needs to be unwound and the funds rolled out to another super fund before they resign?

Anyone have any experience of this?

 

[jorgon]

Hi VI

There is 6 months grace in section 17A(4) of the Superannuation Industry (Supervision) Act 1993. This provides that the fund does not cease to be a superannuation fund because it does not comply with the member/director/trustee requirements until the 6 months has expired. This doesn't apply to new members joining the fund - a new member of legal capacity would need to be appointed as a director immediately (or in the case of individual trustees, would need to become a trustee immediately). But in the case of an outgoing member there would be 6 months for the outgoing member to resign as director (or in the case of individual trustees, to resign as trustee) after resigning as member.

But it would clearly be sensible for an outgoing member to resign as member only after the transfer out of the fund has occurred, not so much for reasons of compliance - more for the member to ensure maximum control over the account balance.

 

[village idiot]

Thanks Jeremy

Looks like the 6 months grace period covers the problem do that is what i am looking for

cheers

 

[Julia]

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