Is a Bare Trust (Custodian) Trustee Company Considered a Special Purpose Company?

According to ASIC, the definition of a special purpose company is outlined in paragraph (f) of Regulation 3 of the Corporations (Review Fees) Regulations 2003, which specifies the following criteria:

• The company’s constitution prohibits the distribution of the company’s income or property to its members; and
• The sole purpose of the company is to act as the trustee of a regulated superannuation fund, as defined in section 19 of the Superannuation Industry (Supervision) Act 1993.

If a company is used for other purposes, such as trading, it will no longer qualify for the reduced ASIC review fee of $65 (as of 01/07/2024).

It’s important to note that a trustee company for a bare trust, also known as a property custodian trust (which holds property for an SMSF when it borrows), or a family discretionary trust does not qualify for the reduced ASIC annual fee.

These types of trusts are not covered under the regulation.

In short, the answer is “No,” a bare trust (custodian) trustee company is not considered a special purpose company.

For further information regarding special purpose companies, please feel free to contact the BREEZER Group team. We are here to assist!

Posted on October 25, 2024