How to change SMSF individual trustees to a corporate trustee

Changing your SMSF from individual trustees to a corporate trustee is generally straightforward, as long as you have the right professionals to guide you. The name of your fund itself does not change unless you want it to, but the full legal name will change as it incorporates the new trustee’s name.

Changing an SMSF trustee requires:

• Getting the legal paperwork correct
• Getting the timing correct
• Changing the title of SMSF assets

What is the process for changing an SMSF from individual trustees to a corporate trustee?

Getting the legal paperwork correct

1. Review the SMSF trust deed to confirm it allows the appointment of a corporate trustee and how this should be done noting that for older funds we may need to upgrade your deed as part of the process.
2. Set up a ‘special purpose company’ to act as a sole purpose SMSF trustee. It is not a legal requirement, but it is considered an industry standard. An existing company can act as an SMSF trustee, but the ongoing annual ASIC fees are higher, and in certain circumstances the SMSF assets may be at risk.
3. Ensure every member of the SMSF is also appointed as a director of the new corporate trustee, and only members can be appointed, with some limited exceptions.
4. Director IDs are required for each member which can be applied for via the ABRS for individuals who haven’t received one previously.
5. Execute related documents such as:

• a ‘Deed of Appointment and Retirement’
• Resignation of the individual trustees in a manner specified under the SMSF Deed (which is why we sometimes need to update Deeds before we start)
• Consent to act by each director of the new corporate trustee
• Completing Trustee Minutes/Resolution which accept the resignation of the individual trustees and appointing the new corporate trustee
• Update the fund’s investment strategy

6. New ATO trustee declarations to be signed by each director, regardless of whether they signed one as an individual trustee.
7. Notify the ATO online which we will do for our clients or via the paper form ‘Change of details for superannuation entities’.
8. Notify other third parties
9. Change the title of SMSF assets, including bank accounts. 

Getting the timing correct

• When upgrading the trust deed, ensure it is executed by the trustee in office at that time. For example, do not have the new corporate trustee sign a trust deed variation before the ‘Deed of appointment and Retirement’ has been properly executed.
• The ATO must be notified within 28 days of the change being made.
• The ATO trustee declaration must be signed within 21 days of becoming a director of the corporate trustee.
• The ATO conducts several checks on the corporate trustee and the new trustee’s directors, including insolvency history, late lodgement of tax returns, and associations with businesses that have had issues. It also matches details between the fund and the ATO. Typically, this does not take long, but in some circumstances it can. The ATO flags the fund as ‘regulation details withheld’ when there is a potential risk, and returns it to ‘complying’ when the assessment is completed and any issues are resolved. Certain employer contributions and rollovers may be delayed when the fund’s status shows ‘regulation details withheld’.
• Some banks do not simply change the title but instead require the SMSF to close the fund account and open a new one, possibly causing delays in receiving contributions, dividends, or trust distributions.

Changing the title of SMSF assets

The fund must have clear title to its assets. As a trust is not an entity, the corporate trustee must hold title. There are minor exceptions, usually arising from State or Territory law. When changing trustees, the bank or another investment provider will require proof of the change, such as the latest trust deed and the Deed of Appointment and Retirement. Generally, the change of title does not trigger a capital gains tax event or stamp duty because the SMSF remains the beneficial owner. However, it is always wise to check with the fund’s SMSF accountant.

• Bank accounts – amend the title or open a new bank account if required. If opening a new account, no new transactions are allowed until the new bank account is opened. This may mean updating any direct debits with the new account details; however, some banks may link the existing direct debits to the new account, so you need to check with the fund’s bank.
• Property – transfer the property title – no amendment is required if the property is subject to a limited recourse borrowing arrangement (LRBA), as the title is in the custodian’s name. The title is registered with the relevant state’s Land Title Registry. A conveyancer or solicitor can help you transfer the title correctly.
• Term Deposits – generally, banks do not allow a change of name. You would have to break the term deposit and put in place a new, updated term deposit. Alternatively, the term deposit could be allowed to mature, but the SMSF auditor may breach the fund or simply note it in the auditor’s management letter.
• Managed Funds – A wrap account or other similar investment platform holds managed funds through a separate custodian on behalf of an SMSF. The administrator apportions a share of the underlying assets, income, and expenditure to the SMSF. Ownership of the assets does not change. However, the investment platform will amend the account title when evidence of a change of trustee is provided. Managed funds can be held directly by an SMSF. When you provide supporting evidence, managed funds will transfer the title of units the SMSF directly owns; this can be time-consuming if the fund holds a large portfolio of managed funds.
• Listed shares and listed managed funds – there are many ways to transfer the title of listed equities, including:
  • If the listed shares are CHESS Sponsored (sponsored by a broker with the whole portfolio under one Holder Identification Number (HIN) starting with an ‘X’), the broker can undertake the transfers, and a fee may be charged (check with your broker).
  • Close the fund’s broker account and the share registry will reissue the shares as ‘Issuer Sponsored’ with each company having a specific security holder number (SRN). A fund may have multiple SRNs for the same company unless the exact details are used for each parcel of shares purchased.
  • Issuer sponsored shares can be transferred via an off-market transfer form directly with the relevant share registry; a fee is charged by each share registry, and the amount varies but generally ranges between $27.50 and $65 per holding.

Updating common share registries with a new corporate trustee when shares are Issuer Sponsored

Share Registry	Form Type	Cost	Link
Computershare	Physical form – print the form, complete it, and then return it by post – only the original is accepted.	$69	Computershare Instructions Contact number: 1300 850 505
MUFG Corporate Markets (previously Link Market Services)	Physical form – the form enables you to type your responses, which can be printed and returned by post – only the original is accepted.	$55 MUFG – Payment	MUFG Instructions Contact number: 1300 554 474
Automic	Physical form – the form enables you to type your responses, which can be printed and returned by post or emailed to hello@automicgroup.com.au	$77 Automic – Payment Payment can also be made via phone using Westpac Payway – Dial 1300 885 175 and follow the prompts- Biller code ‘310011’.	Automic Instructions

Common details to complete an off-market standard transfer form include:

Question/Requirement	Response
Consideration	Nil
Full registered name (s) of Seller (s)/ Transferor (s)	The name should match a share registry holding or dividend statement – it is crucial to match the exact name – example ‘John & Freda Smith <J&F Smith SFD>’
SRN	Can be found on the fund’s issuer-sponsored holding statement. The security holder reference number starts with an ‘I’ or ‘C’ and is followed by up to 12 digits, i.e. I000123456789
Full name (s) of Buyer (s)/Transferee (s)	An example is ‘John and Freda Pty Ltd <J&F Smith SFD>’ Some share registries separate the legal name ‘John and Freda Pty Ltd’ and the account designation ‘<J&F Smith SFD>’
Consistency	Ensure the details of each holding are exactly the same
Proof of identity of the seller/Transferor	Original certified copy of current driver’s licence or passport for each registered holder, i.e. this would be John Smith and Freda Smith – some share registries allow eVerification and have a wider range of verification documentation
Proof of identity of the buyer/Transferee	The share registry may also require proof of identity for the buyer/transferee – some share registries allow eVerification and have a wider range of verification documentation

Hint: Most fund assets should be held in the trustee’s name and designated for the fund, i.e., ‘Smith Pty Ltd ATF Fred Smith SMSF’. Some exceptions apply, such as real property subject to an LRBA, or where some states require the trustee’s name only. If an SMSF has a special purpose corporate trustee, the trustee company can hold property and other assets solely in its name.

When would my SMSF change to a corporate trustee?

The best time to appoint a corporate trustee is when you set up the SMSF.  This saves time and effort and, in certain circumstances, can save money. Our set-up fee is a fixed $2,000 (plus GST) and includes the cost of establishing a special purpose trustee company.

Certain life events make a corporate trustee a sensible choice. A marriage breakdown, a spouse’s death, or a member losing physical or mental capacity are times to review the trustee structure. If you end up as the sole member of your SMSF, a corporate trustee lets you be the sole director and member without sharing decision-making with a friend or other relative.

How can we help?

Our firm is a specialist SMSF firm run by accountants and lawyers. We can assist you:

• setting up a special purpose company
• prepare a ‘Deed of Appointment and Retirement’
• review and amend your SMSF trust deed, if required
• lodge the ATO ‘Change of details for superannuation entities’ online
• draft the following documents:
  • trustee minutes/resolutions to accept the resignation of individual trustees
  • appoint a new corporate trustee
  • director consent to act
  • individual trustee resignations
  • template to update the fund’s investment strategy
• assist you with changing the title of the fund’s assets – however, change of property title needs to be prepared by a conveyancer or by your solicitor
• review the fund’s LRBA documentation and prepare a ‘Deed of Acknowledgment’ as evidence supporting no change to the LRBA