Choosing Between an Individual and Corporate Trustee Structure– It’s A No Brainer!

When you set up an SMSF you will be required to choose between two different trustee structures. The choices are an individual trustee structure where the trustees are natural persons OR a corporate trustee structure where the trustee is a company and the members of the SMSF are directors of the company.

A good SMSF adviser will explain the differences and the advantages and disadvantages of each to you.

As a practising SMSF Accountant & Adviser I strongly recommend that all our clients have a corporate trustee structure in fact using a special purpose company (see my blog entitled “Having a Special Purpose Company as your SMSF Trustee” for details on how to qualify for reduced ASIC fees).

The advantages of a corporate trustee structure include:

  • Fund assets are owned in the Corporate Trustee name therefore there is less administration involved if there is a change of Trustees.
  • The SMSF can have one member, this is facilitated by a sole director corporate trustee.
  • Estate planning advantages as there is no need to restructure the fund or bring another Trustee into the fund especially at such an inopportune time as death of a member.
  • Property and/or Borrowing transactions – a company has limited liability which is important when owning property for any claims brought against the Trustee, also lenders prefer to deal with a corporate trustee.
  • Lower penalties for contraventions as the penalty typically only applies once to a company for each contravention whereas an administrative penalty can be imposed on each individual trustee.

The only advantage I can see of having individual trustees are the lower initial costs as you do not have to purchase a company and also the ongoing savings of not having to pay the ASIC annual company review fee. However, these initial savings are far outweighed by the long term benefits of having a Corporate Trustee Structure.

The administration involved in changing the names of trustees cannot be understated. Imagine you have Peter Bo and Paul Bo As Trustees for The Bo Super Fund and you have 50 ASX shares and 3 bank accounts. Peter Bo suddenly dies and Mary Bo is appointed as a Trustee. You will need to organise to change the name of the investment on 50 shares and 3 bank accounts to Paul Bo and Mary Bo As Trustee for The Bo Super Fund. With A Corporate Trustee say the company was Bo Pty Ltd ATF The Bo Super Fund. You would just need to complete the ASIC forms to remove Peter as a Director and appoint Mary as a Director but there is no administration involved with the investments – it is so much simpler.


From a practical point of view, I have experienced a number of cases with clients where the spouse has died or there is a divorce and even one case where a prior associate cannot be located and there are difficulties 5, 10 even 20 years later with the investments still being in the wrong names and the trustees being unable to have them transferred into the correct trustee name because the prior trustee cannot provide a signature and the share exchange will not effect the change.


If you received poor advice or chose the wrong structure at the outset is it possible to correct that now? Yes, we do this all the time for clients. We can convert an individual trustee structure to a corporate trustee structure. Please contact us for a quote and we will be happy to assist.

SMSF Accountant

Susan O’Connor

Susan O’Connor is an Accountant and SMSF expert with over 25 years of experience. Five years ago, she started her own successful accounting practice, specialising in SMSFs and all things super. She is passionate about teaching people about super and inspiring them to get invested in their own super. She has been awarded a Fellow of CPA’s, holds a B Bus and Diploma of Financial Planning, is a Registered Tax Agent, and holds an Australian Financial Services Licence to provide advice on SMSFs.

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