Who can be a trustee? 

In setting up and running a self-managed super fund (SMSF), a member can take on the role of either an individual trustee, or director of the company set up for the purposes of being  the trustee (corporate trustee). 

An individual trustee or corporate trustee holds and invests the SMSF assets on behalf of the members and in benefit for their retirement. 

Generally, to be a trustee of an SMSF you must be over age 18 and not under a legal disability (e.g. mental incapacity) or a ‘disqualified’ person. The minor’s parents or guardian will typically assume responsibility on matters relating to the trust until the minor turns 18 years of age.

You are considered a disqualified person if you or any of the responsible officers of the corporate trustee:

• Have ever been convicted of an offence involving dishonesty
• Have ever been subject to a civil penalty under superannuation legislation
• Are an insolvent under administration or an undischarged bankrupt, or
• Have been disqualified by a court or regulator (e.g. the ATO or APRA).

In addition, it is important that the central management and control of the SMSF remains in Australia. If a SMSF member is moving permanently overseas, they would need to either dissolve the SMSF and transfer funds into another super fund, such as a retail or industry super fund, or consider appointing someone to replace them as trustee using an enduring power of attorney or providing control to other trustees remaining in Australia. Current SMSF residency rules mean that where trustees are ‘temporarily’ outside of Australia for up to 2 years, central management and control of the fund will still be generally considered to remain in Australia.

Note that in the 2021-22 Federal Budget, the government proposed to relax the SMSF residency rules so that the period of absence from Australia for trustees to still retain management and control of the SMSF was to generally be extended from 2 years to 5 years. This measure is intended to allow more members of these types of super funds to continue to contribute to their super fund whilst temporarily overseas.  The proposed commencement date was from 1 July 2022. However, legislation is still yet to be passed.