Trustees must keep their personal and business assets separate from the fund’s assets. All assets of the fund must be appropriately registered in the names of all trustees or in the name of the corporate trustee as trustee for the fund.
The Smith Superannuation Fund has two individual trustees/members, Peter and Wendy Smith. The fund’s assets should be held in the name of ‘Peter Smith and Wendy Smith as trustee for the Smith Superannuation Fund.’
If Peter and Wendy have a corporate trustee in place, Smith Super Pty Ltd, then the fund’s assets should be held in the name of ‘Smith Super Pty Ltd as trustee for the Smith Superannuation Fund.
Where it’s not possible to use the name of the fund, SMSF trustees should clearly document the fund’s ownership of the asset.
The names of all trustees should be as owners of all assets even if the way the fund is run is that particular assets are earmarked for certain members (e.g. you have two share trading accounts and one is used to invest your super and the other is used for your spouse’s super). This is because legally, the Trustee owns all fund assets regardless of whether or not it has chosen to earmark some for one member rather than another.
The Smith Superannuation Fund has two members – Peter and Wendy – and their company Smith Super Pty Ltd is the trustee of the Fund. They decide to set up two share trading accounts. One is earmarked for Wendy’s super and one is for Peter’s. They might set up the ownership accounts as follows:
Smith Super Pty Ltd as trustee for the Smith Superannuation Fund (Wendy)
Smith Super Pty Ltd as trustee for the Smith Superannuation Fund (Peter)
This way, it is clear that Smith Super Pty Ltd is the legal owner of both accounts but it is easy for Wendy and Peter to see which one is which.
Copyright, Heffron 2018
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