It is advisable that you have a corporate trustee as the trustee of the Superfund. This ensures continuity. Often the husband and wife will decide to be the trustees of the SMSF and this is not advisable. If you don’t have a corporate trustee it can cost you more by way of fees and charges that are levied on the SMSF. Also in the event that one of the trustees passes away, it will leave you in a situation where there is only one trustee and additional costs have to be incurred to appoint another trustee and this procedure can be costly. However if you have a corporate trustee, this ensures continuity. – https://lawadvisor.com/au/articles/buying-a-property-in-the-name-of-your-self-managed-super-fund-smsf
https://www.dbalawyers.com.au/should-your-smsf-have-a-corporate-trustee-or-individual-trustees/
| Corporate Trustee | Individual Trustees |
| Continuous succession A company has an indefinite life span; in other words, it cannot die. A company makes succession to control more certain on death or incapacity. | Ceases upon death Timely action must be taken on death to ensure the trustee/member rules are satisfied. (SMSF rules do not allow a sole individual trustee/member SMSF.) |
| Administrative efficiency On the admission or cessation of membership, that person becomes or ceases to be a director of the company. Thus, the title to all assets remains in the company’s name. | Extra and costly paperwork The admission or cessation of a member requires that person to become or cease to be an individual trustee. As trust assets must be held in all trustees’ names, the title to all assets to be transferred to the new trustees. |
| Sole member SMSF You can have an SMSF where one individual is both the sole member and the sole director. | Sole member SMSF A sole member SMSF must have two individual trustees. |
| Greater asset protection As companies have limited liability, they provide greater protection where a party sues the trustee for damages. | Less asset protection If an individual trustee suffers any liability, the trustee’s personal assets are also exposed. |
| Estate planning flexibility A company offers far greater flexibility for estate and succession planning, as the trustee does not change as a result of the death of a member. | Extra administration and costs The death of a member gives rise to considerable administrative work and costs at an inopportune time. |
| Lower penalties The administrative penalty regime typically only applies to a company once for each contravention. | Higher penalties An administrative penalty can be imposed on each individual trustee for each contravention. Thus, having two individual trustees can double the administrative penalty (typically $18,500 each for FY2024) that would otherwise apply to a corporate trustee. |
| Overseas Members It is easier to evidence that the central management and control (‘CM&C’) of a corporate trustee remains in Australia. | Extra risk An SMSF with individual trustees would generally have greater difficulty showing its CM&C remained in Australia. |
| Lump sums and pensions An SMSF with a corporate trustee can pay benefits either as pensions or as lump sums. | Lump sums or surrendering a pension A member must surrender their pension entitlement if they wish to obtain a lump sum (a fund must have its primary purpose of paying a pension). Thus, extra paperwork is needed to surrender a pension entitlement to a lump sum payment. |
| SMSF borrowing (LRBAs) Lenders prefer dealing with a corporate trustee when providing a limited recourse borrowing arrangement. | More legal work Lenders may have to comply with greater legal hurdles with lending to individual trustees. |