Pros/cons of multiple SMSFs

Discussion in 'Superannuation, SMSF & Personal Insurance' started by ChrisP73, 15th Aug, 2021.

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  1. ChrisP73

    ChrisP73 Well-Known Member

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    Good article here
    Running multiple SMSFs: What are the pros and cons?

    Doesn't seem to address use of a single/common corporate trustee between multiple funds. Reduced setup costs but probably not much different for operational costs apart from the annual ASIC special purpose company fee $56

    Risks, or other benefits of a common trustee company?
     
  2. JohnPropChat

    JohnPropChat Well-Known Member

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    The upside is $56/year, the downsides can be many...

    All the issues of sharing a trustee company plus possible compliance nightmares
     
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Asset protection and estate planning
     
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  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    One of the strategies concerns high balance members. You cannot have multiple accumulation accounts in the one fund. The strategy to retain two accumulation account/s in two funds is very rare and means you can avoid inheritance issues which may occur if this was blended. It is exceptionally rare. It would normally be a matter that would occur after estate planning legal advice.

    Otherwise it is exceptional unusual and rare. The strategy requires that ALL members and Directors are mirrored in each SMSF without exception. Parents acting as a trustee for a minor is a caution. It has a trap and should be avoided. I once saw someone suggest this strategy and then one of the parents died. A absolute mess asthey really didnt realise they had a issue until 6 month later and then the fund was technically non-compliant. The lawyer asked to consider how to fix it was a smsf expert and was of the view it was not good advice. The solution was to replace the trustee company at signifcant cost and difficulty and this was for BOTH funds. That could have been avoided by having two independed trustee companies all along. Its a minor cost to avoid problems later. Given smsfs strategies like this occur with higher balance members and older members its a risk you need to consider and avoid.

    I would avoid it. If you have that sort of wealth and issues the cost of a extra company is peanuts. It may even allow independent legal personal representatives which a shared trustee company might be unable to do
     
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