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How to change name of SMSF trustee for a portfolio?

Discussion in 'Medium/Long Term Investing' started by AlisterN, Nov 28, 2010.

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  1. AlisterN

    AlisterN

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    My SMSF changed trustee from my company to my wife and I. The portfolio of the SMSF now has some securities registered as XYZ Pty Ltd <XYZ Superannuation A/C> and some as Alister & Wendy <XYZ Superannuation A/C>.
    The correct procedure is to fill out a form with the new details, accompanied by a certified copy (signed in triplicate by a JP etc) of the minute of the meeting that changed the trustee . My problem is that I can no longer find this minute due to changed accountants (the change occurred about 4 years ago). My current accountant tells me quite emphatically that all I need to do is an off-market transfer from XYZ Pty Ltd <XYZ Superannuation A/C> to Alister & Wendy <XYZ Superannuation. This sounds very easy but I thought I would run it by the forum first in case there's a hitch. The particular questions I have are:
    1. I will be usng the same HIN for both sellor and buyer. Is this acceptable?
    2. What consideration should I use?
    a. The average cost so that there is no net gain or loss.?
    b. Current price?
    c. Zero ?
    3. What date should I use? I suspect it would be the current date.

    One message I have got from this forum is to get it right when you do these things and hence I would appreciate any knowledge and wisdom that might be available from within the ranks.
     
  2. awg

    awg

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    Re: How to change name of smsf trustee for a portfolio

    imo, the best way is to put ALL your questions in writing via email to yr accountant, because a mistake could be costly

    I am in pension mode so capital gains no longer are taxed, but if you liquidate all your positions while in accumulation mode, wont that mean a CGT liability my be incurred ? ( unless you have nett loss)

    The best reason put forward to me for chosing a special-purpose Corporate Trustee, is to avoid problems like this.

    When I did my transfers, I used the price at date of sale, as it is simple, and no-one can mount any argument it.

    Enjoy lots of form filling out, and make sure you dont make even the slightest mistake, because they will send it right back.

    Also ring the broker that you use, even if it is online broker they will give you some assistance with the formwork, Share Registry peeps also
     
  3. Julia

    Julia In Memoriam

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    Alister, was it your accountant who told you that you had to supply certified copy of the minute to accompany what I presume is a transfer form?

    If you have lost the minute, wouldn't there be a record of it with your accountant for that tax year as he would have surely kept a copy of all documentation for the auditor?

    Do you have any other documentation demonstrating the change of Trustee name?

    I have never changed the name of my SMSF but did change Trustees a few years ago. That involved a new legal document as an appendix to the original Trust Deed. If you have something like this, then surely that would substitute for the dreaded Minute?

    Perhaps run it by the ATO who are usually pretty helpful.

    I'd echo awg's caution about incurring CGT if you are not in pension phase.

    It's an interesting situation. Hope you'll keep us posted re the outcome.
    Good luck.
     
  4. kavla1970

    kavla1970

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    Re: How to change name of smsf trustee for a portfolio

    I agree.
     
  5. kavla1970

    kavla1970

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    Just be careful from a CGT point of view. Their might be exemptions and the TAO are usually helpful.
     
  6. awg

    awg

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    If you do the transfer form yourself, is free

    the broker does it, was about $52 ( per share holding)

    If your accountant has to sort out the mess, could be $$$

    doncha luv simpla supa;)
     
  7. tinhat

    tinhat Pocket Calculator Operator

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    If your SMSF changes trustee you will need to change the trust deed. I would not have changed from having a company as trustee to individuals. If individuals are trustees your fund will need a minimum of two members as trustees. If one of your individual trustees dies then you will need to appoint another trustee which might be a problem if there are only two members of the fund to start with. If a company is trustee then all members of the fund need to be directors of the trustee company but the minimum number of directors of the company (and members of the fund) is one. Every time you change trustees (due to members joining and leaving the fund) you need to update the trust deed. But if a company is trustee you only need to appoint the members as directors or remove them if they leave the fund which only requires you to update the ASIC record. Also, the ASIC fee for a SMSF trustee company is less that $50 per year. A company which is a SMSF trustee does not have any other reporting obligations other than to pay the company review fee each year.
     
  8. Judd

    Judd

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    Just to throw in my uneducated two-cents worth. What your accountant is suggesting seems strange.

    All that is happening is that there is a change in the details of the trustee and no change to the underlying beneficiaries or the SMSF itself. Therefore, how can there be any sale of assets? Nothing is being sold nor is ownership changing. The SMSF owns the assets not the trustee whoever that may be.

    Cheers

    Judd
     
  9. Judd

    Judd

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    Just to add to my previous post.

    You will have a new HIN. The share registry will alter the holding from Company Pty Limited ATF <SMSF name> to Mr & Mrs Name ATF <SMSF name>. For the purposes of the share registry this is a different entity so a new HIN is necessary. That causes its own set of problems. The share registry will view it as a new shareholder and you will get all the paperwork associated with that. Loads of fun.

    As per my previous post, it is only a change of trustee, not a sale or disposal of shares, so CGT is not applicable according to my understanding. Your accountant should have checked this out but maybe not. Is he/she a superannuation specialist? If not, change accountants.

    The Company will need to minute that it is resigning as trustee and then the new trustees will need to note that and acknowledge they are now the trustees of the fund.

    tinhat is spot on. A number go on about how difficult it is to get a competitive interest rates when under a Company structure but that is a minor inconvenience. From experience, I can assure you that when the inevitable occurs, ie one trustee predeceases the other, you will have all sorts of hassles, including emotional issues, and wish you had never moved from a Company structure.

    Cheers

    Judd
     
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