All Topics / Legal & Accounting / Changing from Individual trustee to corp trustee for SMSF Holding trust
My SMSF is buying a property (yippeeee)
I was poorly advised in the early part of my SMSF journey and my SMSF was established with an individual trustee for my Holding Trust (ie/ me as an individual).
Last week I went to a SMSF Trustee education seminar and the strong recommendation was to have a corporate trustee for the Holding Trust.
(The Holding Trust will be borrowing money under an installment warrant so the SMSF can complete the purchase.)So – how do change the individual trustee to a corporate trustee???
I need to do this fairly quickly, as I sort-of bought the property at auction on Saturday.
Sort-of,as it passed in, and I negotiated and agreed to meet the vendors reserve, but I took a standard sale contract not an auction contract. So when I go to sign the docs on Monday pm and put down the 0.25 per cent deposit, do I sign as the individual Holding Trust trustee or do I put up the deposit, dont sign anything, and ask for a few days to get the corporate trustee in place? or can I change trustees after I pay the deposit, but before we fully exchange???I dont want to shilly-shally too much as the reason I got it at a good price was that others could not get finance in time, so if the vendor goes back to the market she will get quite a bit more than under auction conditions.
All comments appreciated. I need to act by 4pm Aug 2.
If you are planning on using an instalment warrent borrowing structure you need to exchange contracts in the name of the security custodian not in the name of the trustee as trustee of your SMSF.
A few things about the security custodian;
1/ it has to be a new company
2/ it has to be in existence (registered with ASIC) prior to entering into the contract.Also if your looking to borrow from a bank be careful as their SMSF products are not all the same and they will take some time to assess your application let alone approve and then settle.
Because of the above, make sure that you get as long a finance clause as you can before the contract goes unconditional.
In answer to your question….."do I sign"…..I wouldn't.
Kuradji – can you give us an update – how has this purchase progressed?
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